Section 192A - TDS on EPF Premature Withdrawals
- Post By TaxTutoria
- Apr 3
- 1 min read
Section 192A of the Income Tax Act, 1961, regulates TDS on EPF Premature Withdrawals to ensure tax compliance on early withdrawals while encouraging long-term savings. TDS applies when an employee withdraws funds from the Employees’ Provident Fund (EPF) before completing five years of continuous service.
Applicability of TDS on EPF Premature Withdrawals
TDS applies when an employee withdraws EPF before completing five years of service.
Threshold Limit: No TDS is deducted if the withdrawal amount is ₹50,000 or less.
TDS Rate for EPF Premature Withdrawals
10% TDS is deducted if the employee provides a PAN.
20% or the highest tax rate is applicable if PAN is not provided.
Who Deducts TDS?
The trustees of the Employees’ Provident Fund Scheme, 1952, or any authorized person deduct TDS on EPF premature withdrawals at the time of payment.
Taxable Components of EPF Withdrawal
Employer’s contribution & interest on it – Taxable (TDS applicable).
Employee’s contribution – Not taxable (No TDS).
Interest on employee’s contribution – Taxable (TDS applicable).
When is TDS Not Deducted?
TDS on EPF premature withdrawals is not applicable if:
The employee submits Form 15G/15H, confirming that their total income is below the taxable limit.
The EPF balance is transferred to another recognized provident fund instead of being withdrawn.
Post-Retirement Interest and TDS
If the EPF remains unclaimed after retirement, interest earned on it is subject to TDS under Section 194A.
Understanding TDS on EPF premature withdrawals helps employees plan their finances while ensuring tax compliance.
Stay tuned for our next article, where we discuss Section 193 – TDS on Interest on Securities in details.