Employee Provident Fund Organization, via a circular on May 20, 2019, to its zonal and regional commissioners, forwarded circulars regarding the deduction of tax at sources, i.e., Income Tax Deduction from salaries under section 192 of the Income Tax Act, 1961, during the financial year 2018-19. The EPF circular emphasized situations under which the accumulated PF balance due and payable to the employee is not liable for TDS under section 192A of the Income Tax Act, 1961 as follows:
1. If an employee has rendered continuous service with their employer for a period of 5 years or more; or
2. If, even though the employee has not rendered such continuous service, the service has been terminated due to reasons of ill health of the member, contraction/discontinuation of the employer's business, or other causes beyond the control of the member; or
3. Transfer of PF from one account to another PF account due to a change of employment by the employee.
For ascertaining "Continuous Services" as stated above in points (1) and (2), the total service in the present establishment as well as the previous establishment is counted. Therefore, it is advisable for employees to merge all the PF accounts.
Employers of establishments covered under the Act are advised to appraise their employees during their exit from employment on the above-applicable TDS on payment for PF settlement.
An attachment with this alert is the copy of the above-said EPFO and CBDT circulars for your perusal.
From India, Madras
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211. If an employee has rendered continuous service with their employer for a period of 5 years or more; or
2. If, even though the employee has not rendered such continuous service, the service has been terminated due to reasons of ill health of the member, contraction/discontinuation of the employer's business, or other causes beyond the control of the member; or
3. Transfer of PF from one account to another PF account due to a change of employment by the employee.
For ascertaining "Continuous Services" as stated above in points (1) and (2), the total service in the present establishment as well as the previous establishment is counted. Therefore, it is advisable for employees to merge all the PF accounts.
Employers of establishments covered under the Act are advised to appraise their employees during their exit from employment on the above-applicable TDS on payment for PF settlement.
An attachment with this alert is the copy of the above-said EPFO and CBDT circulars for your perusal.
From India, Madras
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