HI ALL, Can part of the epf be deducted as TDS? if yes, then how is it possible in un-exempted unit.
From India, Phagwara
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19From India, Phagwara
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Hi,
EPF is a retirement benefit for which we get tax exemption on our contributions. Exempted organizations (companies with EPF trusts) deduct TDS when an employee leaves the company and withdraws the money. Typically, most EPF trusts deduct 30% of the EPF amount. In the case of unexempted employers, PF accounts are managed by RPFC. In such cases, RPFC does not deduct TDS on PF withdrawals. However, individuals who withdraw the EPF amount must declare it as income in the financial year since they claimed IT exemption under Sec.80c.
I hope this provides clarification.
Regards,
Ramanjaneya Reddy.G.K
From India, Bangalore
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EPF is a retirement benefit for which we get tax exemption on our contributions. Exempted organizations (companies with EPF trusts) deduct TDS when an employee leaves the company and withdraws the money. Typically, most EPF trusts deduct 30% of the EPF amount. In the case of unexempted employers, PF accounts are managed by RPFC. In such cases, RPFC does not deduct TDS on PF withdrawals. However, individuals who withdraw the EPF amount must declare it as income in the financial year since they claimed IT exemption under Sec.80c.
I hope this provides clarification.
Regards,
Ramanjaneya Reddy.G.K
From India, Bangalore
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If TDS is already being deducted from my salary, then should TDS from my EPF also be justified? Can tax be deducted from the EPF payable before it is being deposited via bank challan? (If my EPF is 1000, can the establishment deduct 30% as mentioned above from the EPF being deposited)
From India, Phagwara
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From India, Phagwara
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no they cannot do that they should be depositing full epf amount in ur example 1000 should be deposited apatt from this this epf deducted amount will be considered under 80CC for tax exemption
From United States, Ogden
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From United States, Ogden
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sir, give the reason of the first one.(TDS from my EPF would be justified?) EPF is TAXable if it is more then one lakh?
From India, Phagwara
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From India, Phagwara
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OK Prasad,
If I am providing services to a company and getting paid as an employee, and the company is deducting TDS for the services I provide, is it justified for the unexempted company to deduct TDS on my EPF? (I am not well-versed in Income Tax Law, so please correct me if I am mistaken).
From India, Phagwara
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If I am providing services to a company and getting paid as an employee, and the company is deducting TDS for the services I provide, is it justified for the unexempted company to deduct TDS on my EPF? (I am not well-versed in Income Tax Law, so please correct me if I am mistaken).
From India, Phagwara
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Hi Atom,
When you are earning the salary, your gross salary will be considered as income. For example, if your gross salary is Rs. 50,000 per month and your Basic Salary is Rs. 20,000 on which PF deductions are Rs. 2,400. Since income tax should be calculated on the Gross salary, they should deduct IT on Rs. 50,000. However, the employer will deduct only on Rs. 47,600 since your PF amount is exempted from IT (as it is a retiral benefit). But when you withdraw before retirement, that amount will be considered as normal income, hence TDS will be applicable on the withdrawal.
In case you do not fall under the 30% IT slab, you can claim a refund from the IT department by submitting your IT returns with the help of the TDS certificate (issued by the PF trust) and Form-16.
Regards, Ramanjaneya Reddy.G.K
From India, Bangalore
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When you are earning the salary, your gross salary will be considered as income. For example, if your gross salary is Rs. 50,000 per month and your Basic Salary is Rs. 20,000 on which PF deductions are Rs. 2,400. Since income tax should be calculated on the Gross salary, they should deduct IT on Rs. 50,000. However, the employer will deduct only on Rs. 47,600 since your PF amount is exempted from IT (as it is a retiral benefit). But when you withdraw before retirement, that amount will be considered as normal income, hence TDS will be applicable on the withdrawal.
In case you do not fall under the 30% IT slab, you can claim a refund from the IT department by submitting your IT returns with the help of the TDS certificate (issued by the PF trust) and Form-16.
Regards, Ramanjaneya Reddy.G.K
From India, Bangalore
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But you should know that PF limit is 6500 (wages), so it must not exceed 780.00 (as 12% of 6500). There is some clause which says that beyond the 6500 limit, the PF deducted will be only from the employee's part (employer contribution will remain the same). It is called voluntary PF contribution by the employee.
Now, onto the retirement benefit aspect:
One-third of the PF deductions are for retirement benefits. Therefore, the remaining two-thirds are taxable, and if it exceeds 1 lakh, it is taxable.
Is there a specified time period for TDS deductions concerning years of service?
From India, Phagwara
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Now, onto the retirement benefit aspect:
One-third of the PF deductions are for retirement benefits. Therefore, the remaining two-thirds are taxable, and if it exceeds 1 lakh, it is taxable.
Is there a specified time period for TDS deductions concerning years of service?
From India, Phagwara
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EPF Withdrawals - New Provisions & Rules related to TDS.pptx
TDS(refunds) ON Salary & Withdrawals from EPF Acs.before 5 yrs service.docx