Unions question TDS on PF withdrawals, want order on hold

Friday, May 22, 2015,18:53 IST By metro vaartha A A A

New Delhi | Opposing the government’s decision to deduct tax at source on pre-mature PF withdrawals, trade unions today said they will ask the Labour Ministry to put the EPFO order in this regard on hold. In a notification issued yesterday, Employees’ Provident Fund Organisation (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.
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 told PTI. 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 2,00,000. PF withdrawals should not be taxed. In the current scenario, the PF withdrawals are treated as taxable income if the cumulative service period of a subscriber with present as well as former employers is less than 5 years.
Earlier, many regional heads were not deducting the tax on such PF withdrawals where service period was less than five year. Thus, EPFO got notice of tax demand to many field offices in these cases. The limit of Rs 30,000 is provided under the notification to provide some relief to marginalised people, a senior official said.
Earlier, there was no exempted slab for PF withdrawals for subscribers with less than five years of service. But now, it’s provided in the notification, the official added. Centre of Indian Trade Unions President A K Padmanabhan, an EPFO trustee too, said, While the government is giving so many concessions to investors and industrialists, it is injustice to workers. It’s wrong to tax PF withdrawals.
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.

Latest News

Trump accuses Hillary of wasteful expenditure

Friday, Oct 28 , 2016 ,13:51 IST