It is important for one to understand a basic fact that a Provident Fund or PF account is seen as a retirement-oriented investment option, however, during an emergency, one can also opt for withdrawing PF before the age of retirement, but there is a catch. EPFO allows withdrawal of PF before retirement but if you want to get the money before 5 years of account opening, then TDS (Tax Deduction at Source) is applied on the withdrawal amount. The PF withdrawal rules clearly state that if the EPF/PF account is attached with PAN, the TDS deduction rates stand at 10%, while in the case of EPF accounts without PAN, the TDS rate stands at 20%.
But there are exceptions too. In two cases, PF account holders can avoid TDS deduction while taking out money before 5 years of account opening.
(1) If the PF withdrawal amount is less than Rs 50,000, then there will be no TDS levied on one's PF withdrawal. However, in case the PF amount withdrawn is above Rs 50,000 then the TDS becomes applicable if one's annual income is more than Rs 2.5 lakh."
(2) If the PF withdrawal amount is above Rs 50,000 and PF account holder's annual income is below Rs 2.5 lakh, then, in that case, one can avoid TDS deduction by furnishing Form 15G or 15H."
Source : www.zeenews.india.com
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