EPFO: According to the guidelines issued by the CBDT and the circular issued on 6th April, TDS will be deducted on the interest received from April 1, if more than Rs 2.5 lakh is deposited in your account in a financial year. The rates for which will vary.
EPFO: Employees’ Provident Fund Organization (EPFO) has issued a guideline that if your PF contribution in the current financial year (2022-23) exceeds Rs 2.5 lakh, then TDS will be levied on the interest earned from it. In a circular issued on 6 April, it has been said that its implementation has been started from 1 April i.e. this rule has become effective from 1 April.
On 31 August 2021, the Central Board of Direct Taxes issued a notification saying that TDS will be collected from the interest received if the PF contribution of non-government organization employees is more than 2.5 lakhs and government employees’ PF contribution is more than 5 lakhs. Will go. Which was also discussed during the budget 2022-23.
According to the news published in Business Standard, Gopal Bohra, partner, NA Shah Associates said that according to the guidelines, both taxable and non-taxable accounts of EPFO will be separate.
Which accounts will be taxed?
This rule will be applicable to all EPF subscribers. This includes exempted establishments, unexempted establishments and exempted trusts. Prashant Singh, Vice President and Business Head, TeamLease Services, says that TDS will be applicable in full and final settlement of PF. Will be applicable in transfer of claim. Also, it will be applicable for transfer from one trust to another. Also, it will be applicable in case of death also.
Also, this rule will be applicable in the case of international workers as well.
Who will get the discount?
This rule will not apply to those accounts which have been closed on 31st March 2021. Also, TDS will not be levied on any account that has deposited Rs 2.5 lakh or more in the financial year 2021-22 or in the years preceding it. Apart from this, if a PF account holder withdraws partial amount from his account in the financial year 2022-23 or subsequent years, due to which his amount reduces to less than 2.5 lakhs, then only TDS will not be applicable on his account amount.
What will be the rate of TDS?
It will depend on whether your PF account is linked with PAN or not. If your PF account is linked with PAN, then DTS will be deducted at the rate of 10 percent on the interest received by you and if your PF account is not linked with PAN, its rate will be 20 percent.
For this, you have to submit Form 15G and 15H with valid PAN number. This will reduce your TDS rates. Also, if you are an Indian resident, if this amount is Rs 5000, then TDS will not be deducted on it. If you are an NRI, then TDS will be deducted on the amount of Rs 5000. In the case of NRIs, its rate will be 30 percent. Along with this, an additional cess of 4 percent will be deducted. Apart from this, if this amount crosses the limit of 50 lakhs, then additional cess will be levied on it too. Its rates can range from 10 percent to 37 percent.
Will these rules apply to the already deposited amount?
A question that arises again and again in the minds of many people is that those who have already been contributing, will these rules apply to the amount already deposited in their PF account? So let me tell for them that the rules of deducting TDS will not be applicable on the amount already deposited in their account. It is being started from the new financial year i.e. 2022-23. It has nothing to do with the amount already deposited in the account.
What is the opinion of experts?
Experts are of the opinion that first of all you should make sure that your account is linked with PAN or not. If your EPF account is not linked with PAN, then TDS will be deducted at the rate of 20 percent on the interest earned on the amount deposited in your account in excess of Rs 2.5 lakh. Apart from this, if an employee changes his job during this period, then he should get his account transferred online by filling Form 13.
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