New Delhi/Nagpur: No tax would be deducted at source for PF withdrawals of up to Rs 50,000 from June 1.
The government has notified raising the threshold limit of PF withdrawal for deduction of tax from existing Rs 30,000 to Rs 50,000.
“The Finance Act, 2016 has amended section 192A of Income Tax Act, 1961 to raise the threshold limit of PF withdrawal from Rs 30,000 to Rs 50,000 for Tax Deducted at Source (TDS),” the notification stated.
The government had introduced the proposal to deduct TDS on PF withdrawals in order to discourage pre-mature withdrawal and to promote long term savings.
However, in case Form 15G or 15H is submitted by the member, then TDS is not deducted. These forms are to declare that their income would not be taxable after receiving payment of their PF accumulations from retirement fund body EPFO.