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TDS on PF withdrawal draws ire from Trade Union
Highlights
Opposing the government’s decision to deduct tax at source on pre-mature PF withdrawals, trade unions on Friday said they will ask the labour ministry to put the EPFO order in this regard on hold. In a notification issued on Thursday, EPFO said it will deduct TDS from June 1 on PF withdrawals where accumulations are over Rs 30,000 and the employee has worked for less than five years.
Opposing the government’s decision to deduct tax at source on pre-mature PF withdrawals, trade unions on Friday said they will ask the labour ministry to put the EPFO order in this regard on hold. In a notification issued on Thursday, EPFO said it will deduct TDS from June 1 on PF withdrawals where accumulations are over Rs 30,000 and the employee has worked for less than five years.
According to the EPFO circular, TDS will be deducted at 10 per cent provided PAN is submitted. However, Forms 15G or 15H if submitted won’t entail TDS. These are declaration that the income won’t be taxable after receiving payment of PF accumulations from the EPFO.
“We will oppose the government’s move of deducting TDS (Tax Deducted at Source) at PF withdrawals. We have decided to write to the labour minister for keeping this notification in abeyance,” All India Trade Union Congress secretary D.L. Sachdev said.
Another EPFO trustee and Hind Mazdoor Sabha secretary A D Nagpal said, “We had opposed this move earlier also. Even the EPFO had proposed to exempt cases where accumulations were less than Rs 2 lakh. PF withdrawals should not be taxed.” In the current scenario, the provident fund withdrawals are treated as taxable income if the cumulative service period of a subscriber with present as well as former employers is less than five years.
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