Provident Fund TDS -Tax Deducted at Source

Provident Fund TDS is the amount of tax getting deducted from the Employee by the person paying Trustees of PF.


On this page:

  1. Section Reference
  2. Person responsible to Deduct
  3. Payee
  4. Nature of Income
  5. Additions & Exemptions
  6. When Tax is to be deducted?
  7. Rates
  8. Whether shortfall or excess TDS can be adjusted in future payments?
  9. Notes
  10. PF Exemption

Provident Fund TDS 192(4)

Section Reference

192(4)

Person responsible for Paying (or) Person Liable to Deduct (PAYER)

Trustees of a provident fund

Person from whom tax is to be deducted (PAYEE)

Employee

Nature of Income

Accumulated balances in Provident Fund

Additions & Exemptions

Accumulated balances in Provident Fund to the extent they are exempt under section 10(12) to be excluded

When Tax is to be deducted

At the time of payment of the sum

Rate of TDS

As if, it forms part of 'Salaries'.

Refer Tax Rates for AY 2012-13 and AY 2013-14

Whether shortfall or excess Provident Fund TDS can be adjusted in future payments

Yes

Other Notes

How the Employees' Provident Fund Scheme works?

Both the employees and employer contribute to the fund at the rate of 12% of the basic wages, dearness allowance and retaining allowance, if any, payable to employees per month.

The rate of contribution is 10% in the case of

  • Any covered establishment with less then 20 employees,

  • Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction,

  • Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and

  • Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/ Factories.

Benefits

A member can withdraw full amount at the credit in the fund at the time of retirement from service after attaining the age of 55 year.

Full amount in provident fund can also be withdraw by the member under the following circumstance:

  • A member who has not attained the age of 55 year at the time of termination of service.

  • A member is retired on account of permanent and total disablement due to bodily or mental infirmity.

  • On migration from India for permanent settlement abroad or for taking employment abroad.

  • In the case of mass or individual retrenchment.

PF Exemption

Payment from provident fund is xempt to the extent provided in sec. 10(11) & sec. 10(12).

Any payment received from a Statutory Provident Fund (SPF), is exempt.

Any payment from any other provident fund notified by the Central Government is also exempt. The Public Provident Fund (PPF) established under the PPF Scheme, 1968 has been notified for this purpose.

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