Section 192A - TDS from withdrawal from Employees Provident Fund Scheme - Income Tax - Ready Reckoner - Income Tax

Section 192A : TDS from withdrawal from Employees Provident Fund Scheme Tax is to be deducted by the trustees of Employees Provident Fund Scheme, 1952 framed u/s 5 of the Employees Provident Funds and Miscellaneous Act, 1952 or any other person authorized under the scheme to make payment of accumulated sum to employees, shall deduct income tax thereon at the time of payment of the accumulated balance due to employees at the rate of 10%. When does the liability to deduct tax at source arise: Such tax shall have to be deducted in a case where accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable. However no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than 50,000 rupees. Rate of TDS if PAN is not provided [ w.e.f. 1.6.2015 to 31.3.2023] ** : Any person entitled to receive any amount on which tax is deductible u/s 192A shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate. ** [ Inserted vide Finance Act 2015 w.e.f. 1.6.2015. Now omitted by Finance Act, 2023 w.e.f. 1.4.2023 ]. Compliance with Rules specified in Part A of the Fourth Schedule to the income tax Act, 1961 Part A of the Fourth Schedule to the income tax Act, 1961 contains the provisions relating to RPFs. Under the Existing provisions of Rule 8 of part A of the fourth schedule, the withdrawal of accumulated balance by an employee from the RPF exempt from taxations Tax on accumulated balance (Rule 9 of Part A of the Fourth Schedule) (1) Where the accumulated balance due to an employee participating in a recognised provident fund is included in his total income owing to the provisions of rule 8 not being applicable, the Assessing Officer shall calculate the total of the various sums of tax which would have been payable by the employee in respect of his total income for each of the years concerned if the fund had not been a recognised provident fund, and the amount by which such total exceeds the total of all sums paid by or on behalf of such employee by way of tax for such years shall be payable by the employee in addition to any other tax for which he may be liable for the previous year in which the accumulated balance due to him becomes payable. (2) Where the accumulated balance due to an employee participating in a recognised provident fund which is not included in his total income under the provisions of rule 8 becomes payable, an amount equal to the aggregate of the amounts of super-tax on annual accretions that would have been payable under section 58E of the Indian Income-tax Act, 1922, for any assessment year up to and including the assessment year 1932-33, if the Indian Income-tax (Second Amendment) Act, 1933, had come into force on the 15th day of March, 1930, shall be payable by the employee in addition to any other tax payable by him for the previous year in which such balance becomes payable. Exclusion from total income of accumulated balance. (Rule 8 of Part A of the Fourth Schedule) The accumulated balance due and becoming payable to an employee participating in a recognised provident fund shall be excluded from the computation of his total income ( i ) if he has rendered continuous service with his employer for a period of five years or more, or ( ii ) if, though he has not rendered such continuous service, the service has been terminated by reason of the employee's ill-health, or by the contraction or discontinuance of the employer's business or other cause beyond the control of the employee, or ( iii ) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by such other employer; or ( iv ) if the entire balance standing to the credit of the employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government. Note - Where the accumulated balance due and becoming payable to an employee participating in a recognised provident fund maintained by his employer includes any amount transferred from his individual account in any other recognised provident fund or funds maintained by his former employer or employers, then, in computing the period of continuous service for the purposes of clause ( i ) or clause ( ii ) the period or periods for which such employee rendered continuous service under his former employer or employers aforesaid shall be included. Deduction at source of tax payable on accumulated balance (Rule 10 of Part A of the Fourth Schedule) The trustees of a recognised provident fund, or any person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall, in cases where rule 9(1) applies, at the time an accumulated balance due to an employee is paid, deduct therefrom the amount payable under that rule and all the provisions of Chapter XVII-B shall apply as if the accumulated balance were income chargeable under the head Salaries . Enabling of filing of Form 15G /15H for payment made from withdrawal from Employees Provident Fund Scheme [ Section 197A ]