I left my job after three years and withdrew my EPF balance. The trustees deducted tax and I have no Form 16. On what was the deduction made, and what happens because I had not given my PAN?
Section 192A bites only where the accumulated balance is taxable, and it is rule 8 of Part A of the Fourth Schedule that decides that. The section requires the trustees of the Employees' Provident Funds Scheme, 1952, framed under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, or any person authorised under the scheme to make payment of accumulated balance due to employees, to deduct income-tax at ten per cent where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, and to do so at the time of payment. The only proviso now in the section sets a floor: no deduction where the amount of the payment, or the aggregate amount of the payment to the payee, is less than fifty thousand rupees. The second proviso, which required a Permanent Account Number and imposed the maximum marginal rate in its absence, was omitted by the Finance Act, 2023 with effect from 1 April 2023, so the consequence of no PAN is now whatever section 206AA produces.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2015-06-01, reported as Section 192A of the Income-tax Act, 1961, as amended up to 2026. It bears on section 192A, section Fourth Schedule, Part A, rule 8, section 206AA, section 192 of the Income Tax Act 1961, in TDS Defaults, Salary & Perquisites and Capital Gains Exemptions matters.
Most section 192A disputes are not about the section at all. They are about rule 8 of Part A of the Fourth Schedule, because the section only reaches a balance that is includible in total income 'owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable'. An employee who has rendered continuous service of five years or more, or whose service ended through ill-health or because the employer's business was discontinued or for a cause beyond his control, or whose balance was transferred to a recognised fund with his new employer, is outside the charge and therefore outside the section. A deduction made on such a payment is a deduction on something section 192A does not reach, and the answer is the return, not an appeal against the deductor. The second thing the section does differently is the trigger. Almost every provision in Chapter XVII-B fires on the earlier of the event of credit or payment. This one fires on payment alone: the words are 'at the time of payment of the accumulated balance due to the employee'. A fund that credits a member's account on settlement and pays weeks later is not in default in the interval. Third, the fifty thousand rupee floor is an aggregate floor for the payee, not a per-payment one. A member who takes two part-withdrawals of thirty thousand each in the same settlement is inside the section on the second, and the fund that treated each separately has short-deducted. Fourth, and this is the change that catches people who learned the section when it came in, the Permanent Account Number proviso is gone. Until 1 April 2023 the section carried its own sanction — the maximum marginal rate — and a fund could apply it without looking further. From that date the section says nothing about a missing Permanent Account Number, and the consequence has to be worked out under section 206AA, which produces a different figure and carries its own exceptions. A fund still applying the maximum marginal rate out of habit is over-deducting, and the member is the one who has to chase the refund.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 192A, as it currently stands under the heading 'Payment of accumulated balance due to an employee', reads in full: 'Notwithstanding anything contained in this Act, the trustees of the Employees' Provident Funds Scheme, 1952, framed under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or any person authorised under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent: Provided that no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than fifty thousand rupees.' The current text prints one proviso only. The edition as amended up to 2015 prints the section with a threshold of thirty thousand rupees and with a second proviso reading 'Provided further that any person entitled to receive any amount on which tax is deductible under this section shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate', and carries the footnote 'Inserted by the Finance Act, 2015, w.e.f. 1-6-2015' against the section, and a further footnote 'See rules 29C, 30, 31, 31A, 31AB and 37BA and Form Nos. 15G, 15H, 16A, 26B, 26Q, 26AS and 27A'. The edition as amended up to 2024 prints the threshold of fifty thousand rupees, prints one proviso only, and carries the footnote 'Second proviso omitted by the Finance Act, 2023, w.e.f. 1-4-2023', reproducing the omitted words. The edition as amended up to 2020 prints the threshold of fifty thousand rupees and still prints the second proviso. The edition as amended up to 2016 prints the threshold of fifty thousand rupees and carries against that figure the footnote 'Sub. for "thirty" by Act No. 28 of 2016, w.e.f. 1-6-2016'. All five editions are headed 'Income-tax Act, 1961'.
Deduction under section 192A is at ten per cent of the accumulated balance paid, at the time of payment, by the trustees of the Employees' Provident Funds Scheme, 1952 or a person authorised under that scheme, and only where the balance is includible in the employee's total income because rule 8 of Part A of the Fourth Schedule does not apply. No deduction is to be made where the payment, or the aggregate of payments to that payee, is less than fifty thousand rupees; that figure replaced thirty thousand rupees with effect from 1 June 2016. The requirement that the payee furnish his Permanent Account Number, and the maximum marginal rate that followed its absence, ceased to be part of the section with effect from 1 April 2023; for payments on or after that date the section itself prescribes no consequence for a missing Permanent Account Number.
Not applicable — this is a statement of statutory text and of its amendment history, taken from four published editions of the section. No judicial reasoning is involved.
Notwithstanding anything contained in this Act, the trustees of the Employees' Provident Funds Scheme, 1952, framed under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or any person authorised under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent.
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Handle my notice → Ask a CA on WhatsAppSection 192A bites only where the accumulated balance is taxable, and it is rule 8 of Part A of the Fourth Schedule that decides that. The section requires the trustees of the Employees' Provident Funds Scheme, 1952, framed under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, or any person authorised under the scheme to make payment of accumulated balance due to employees, to deduct income-tax at ten per cent where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, and to do so at the time of payment. The only proviso now in the section sets a floor: no deduction where the amount of the payment, or the aggregate amount of the payment to the payee, is less than fifty thousand rupees. The second proviso, which required a Permanent Account Number and imposed the maximum marginal rate in its absence, was omitted by the Finance Act, 2023 with effect from 1 April 2023, so the consequence of no PAN is now whatever section 206AA produces. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 192A, section Fourth Schedule, Part A, rule 8, section 206AA, section 192 of the Income Tax Act 1961. It is reported as Section 192A of the Income-tax Act, 1961, as amended up to 2026. Most section 192A disputes are not about the section at all. They are about rule 8 of Part A of the Fourth Schedule, because the section only reaches a balance that is includible in total income 'owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable'. An employee who has rendered continuous service of five years or more, or whose service ended through ill-health or because the employer's business was discontinued or for a cause beyond his control, or whose balance was transferred to a recognised fund with his new employer, is outside the charge and therefore outside the section. A deduction made on such a payment is a deduction on something section 192A does not reach, and the answer is the return, not an appeal against the deductor. The second thing the section does differently is the trigger. Almost every provision in Chapter XVII-B fires on the earlier of the event of credit or payment. This one fires on payment alone: the words are 'at the time of payment of the accumulated balance due to the employee'. A fund that credits a member's account on settlement and pays weeks later is not in default in the interval. Third, the fifty thousand rupee floor is an aggregate floor for the payee, not a per-payment one. A member who takes two part-withdrawals of thirty thousand each in the same settlement is inside the section on the second, and the fund that treated each separately has short-deducted. Fourth, and this is the change that catches people who learned the section when it came in, the Permanent Account Number proviso is gone. Until 1 April 2023 the section carried its own sanction — the maximum marginal rate — and a fund could apply it without looking further. From that date the section says nothing about a missing Permanent Account Number, and the consequence has to be worked out under section 206AA, which produces a different figure and carries its own exceptions. A fund still applying the maximum marginal rate out of habit is over-deducting, and the member is the one who has to chase the refund. If it applies to you, the first step is this: Start with rule 8 of Part A of the Fourth Schedule, not with the section. Section 192A applies only where the accumulated balance is includible in total income because that rule does not apply. Where the rule does apply — continuous service of five years or more, or service terminated by ill-health or by the employer's business being discontinued or a cause beyond the employee's control, or a balance transferred to a recognised fund with the new employer — the balance is not taxable and the section has nothing to operate on.
Section 192A, as it currently stands under the heading 'Payment of accumulated balance due to an employee', reads in full: 'Notwithstanding anything contained in this Act, the trustees of the Employees' Provident Funds Scheme, 1952, framed under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or any person authorised under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent: Provided that no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than fifty thousand rupees.' The current text prints one proviso only. The edition as amended up to 2015 prints the section with a threshold of thirty thousand rupees and with a second proviso reading 'Provided further that any person entitled to receive any amount on which tax is deductible under this section shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate', and carries the footnote 'Inserted by the Finance Act, 2015, w.e.f. 1-6-2015' against the section, and a further footnote 'See rules 29C, 30, 31, 31A, 31AB and 37BA and Form Nos. 15G, 15H, 16A, 26B, 26Q, 26AS and 27A'. The edition as amended up to 2024 prints the threshold of fifty thousand rupees, prints one proviso only, and carries the footnote 'Second proviso omitted by the Finance Act, 2023, w.e.f. 1-4-2023', reproducing the omitted words. The edition as amended up to 2020 prints the threshold of fifty thousand rupees and still prints the second proviso. The edition as amended up to 2016 prints the threshold of fifty thousand rupees and carries against that figure the footnote 'Sub. for "thirty" by Act No. 28 of 2016, w.e.f. 1-6-2016'. All five editions are headed 'Income-tax Act, 1961'. The matter was decided on 2015-06-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Deduction under section 192A is at ten per cent of the accumulated balance paid, at the time of payment, by the trustees of the Employees' Provident Funds Scheme, 1952 or a person authorised under that scheme, and only where the balance is includible in the employee's total income because rule 8 of Part A of the Fourth Schedule does not apply. No deduction is to be made where the payment, or the aggregate of payments to that payee, is less than fifty thousand rupees; that figure replaced thirty thousand rupees with effect from 1 June 2016. The requirement that the payee furnish his Permanent Account Number, and the maximum marginal rate that followed its absence, ceased to be part of the section with effect from 1 April 2023; for payments on or after that date the section itself prescribes no consequence for a missing Permanent Account Number.
Not applicable — this is a statement of statutory text and of its amendment history, taken from four published editions of the section. No judicial reasoning is involved. In the words reproduced by the source cited on this page: "Notwithstanding anything contained in this Act, the trustees of the Employees' Provident Funds Scheme, 1952, framed under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or any person authorised under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent."
It was decided by the CBDT Circulars & Instructions on 2015-06-01 and is reported as Section 192A of the Income-tax Act, 1961, as amended up to 2026. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 192A, section Fourth Schedule, Part A, rule 8, section 206AA, section 192, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Deduction under section 192A is at ten per cent of the accumulated balance paid, at the time of payment, by the trustees of the Employees' Provident Funds Scheme, 1952 or a person authorised under that scheme, and only where the balance is includible in the employee's total income because rule 8 of Part A of the Fourth Schedule does not apply. No deduction is to be made where the payment, or the aggregate of payments to that payee, is less than fifty thousand rupees; that figure replaced thirty thousand rupees with effect from 1 June 2016. The requirement that the payee furnish his Permanent Account Number, and the maximum marginal rate that followed its absence, ceased to be part of the section with effect from 1 April 2023; for payments on or after that date the section itself prescribes no consequence for a missing Permanent Account Number. It arises in TDS Defaults, Salary & Perquisites and Capital Gains Exemptions matters, on section 192A, section Fourth Schedule, Part A, rule 8, section 206AA, section 192 of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Count continuous service across employers where the balance was actually transferred. A transfer to the recognised fund maintained by the new employer keeps the earlier period in the reckoning; a fresh account opened and the old one withdrawn does not. Apply the fifty thousand rupee floor to the aggregate. The proviso reads 'the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee', so two payments of thirty thousand each to the same payee are inside the section, not outside it. Deduct at ten per cent, and at the time of payment. Unlike most of Chapter XVII-B, section 192A is not triggered by credit; the words are 'at the time of payment of the accumulated balance due to the employee'. Stop looking for the PAN proviso. The second proviso, which imposed the maximum marginal rate where the payee did not furnish his Permanent Account Number, was omitted with effect from 1 April 2023. Where no PAN is furnished, the consequence now comes from section 206AA and from nowhere else, and the library already carries a separate entry on section 206AA, section 206AA(7) and rule 37BC. For a payment made before 1 April 2023, read the section as it then stood. The omitted proviso governed those payments and the maximum marginal rate, not twenty per cent, was the figure. Where the withdrawal was taxable, claim the credit in the return for the year of payment and reconcile it against Form 26AS; the deductor's return, not the certificate, is what the credit is built on. Where the deduction was made although rule 8 of Part A of the Fourth Schedule did apply, take the point with the deductor first. The deduction is on a payment the section does not reach, and the remedy is a refund on the return.
Superseded by amendment. The section stands, but not in the words it was enacted in, and two of its three numbers have moved. The edition as amended up to 2015 prints the section with a threshold of thirty thousand rupees and with a second proviso requiring the payee to furnish his Permanent Account Number, failing which tax was to be deducted at the maximum marginal rate; against the section that edition carries the footnote 'Inserted by the Finance Act, 2015, w.e.f. 1-6-2015'. The edition as amended up to 2020 still prints that second proviso. The edition as amended up to 2024 prints the threshold at fifty thousand rupees, prints one proviso only, and carries the footnote 'Second proviso omitted by the Finance Act, 2023, w.e.f. 1-4-2023', reproducing the omitted words in full. The current text prints the same single proviso and the same fifty thousand rupee figure. Every one of the four editions is headed 'Income-tax Act, 1961'. The status recorded here is 'superseded by amendment' because the second proviso is gone, and a practitioner working on a payment made before 1 April 2023 must read the section as it then stood, with the maximum marginal rate and not the section 206AA rate as the consequence of a missing Permanent Account Number. The floor has moved once, and the date is on the page. The edition as amended up to 2016 prints fifty thousand rupees and carries against the figure the footnote 'Sub. for "thirty" by Act No. 28 of 2016, w.e.f. 1-6-2016'. Act No. 28 of 2016 is the Finance Act, 2016, and the Finance Bill of that year carried a clause headed 'Amendment of section 192A'. So the threshold was thirty thousand rupees for payments made from 1 June 2015 to 31 May 2016 and fifty thousand rupees from 1 June 2016, and a fund reopening a short-deduction question for an early year must apply the figure in force on the date of payment. No judicial decision on section 192A has been found, and nothing is said here about how rule 8 of Part A of the Fourth Schedule has been applied to particular terminations. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The section was transcribed from five published editions, each headed 'Income-tax Act, 1961': the current one, which supplies the operative text used here; the edition as amended up to 2024, which carries the omission footnote; the edition as amended up to 2020; the edition as amended up to 2015, which carries the insertion footnote and the older figures; and the edition as amended up to 2016, which carries the footnote dating the change in the threshold. The 'decided_on' date, 1 June 2015, is the commencement date printed on the 2015 edition — 'Inserted by the Finance Act, 2015, w.e.f. 1-6-2015' — and nothing else. THE THRESHOLD DATE. The 2016 edition carries against the figure the footnote 'Sub. for "thirty" by Act No. 28 of 2016, w.e.f. 1-6-2016'. Act No. 28 of 2016 is the Finance Act, 2016; the Finance Bill of that year carried a clause headed 'Amendment of section 192A' and is consistent with it. The date is therefore stated in the body of this entry rather than left open. RULE 8 OF PART A OF THE FOURTH SCHEDULE HAS NOT BEEN READ for this entry. What is said here about that rule — continuous service of five years or more, termination through ill-health or discontinuance of the employer's business or a cause beyond the employee's control, and transfer of the balance to a recognised fund with the new employer — is stated as the substance of the gateway the section refers to. A practitioner should read the rule itself before applying it to a particular termination, because the conditions are cumulative in places and the wording on continuous service has its own qualifications. Note also that the label used for it here is deliberately the Fourth Schedule form and not the bare 'Rule 8', which in this library is rule 8 of the Income-tax Rules and concerns tea. SECTION 206AA HAS NOT BEEN SET OUT HERE either. The consequence of a missing Permanent Account Number after 1 April 2023 is stated only as being governed by that section, and this library's entry on section 206AA, section 206AA(7) and rule 37BC is where the computation and the exceptions are worked out. Finally, no successor provision under the Income-tax Act, 2025 has been read, so none is given, and no decision construing section 192A has been found: the entry rests on the statutory text and its printed amendment footnotes alone and claims nothing beyond them. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Deduction under section 192A is at ten per cent of the accumulated balance paid, at the time of payment, by the trustees of the Employees' Provident Funds Scheme, 1952 or a person authorised under that scheme, and only where the balance is includible in the employee's total income because rule 8 of Part A of the Fourth Schedule does not apply. No deduction is to be made where the payment, or the aggregate of payments to that payee, is less than fifty thousand rupees; that figure replaced thirty thousand rupees with effect from 1 June 2016. The requirement that the payee furnish his Permanent Account Number, and the maximum marginal rate that followed its absence, ceased to be part of the section with effect from 1 April 2023; for payments on or after that date the section itself prescribes no consequence for a missing Permanent Account Number.
TaxSphere, “Statutory position — s.192A: ten per cent on a premature provident fund withdrawal, a fifty thousand rupee floor, and the Fourth Schedule rule that decides whether the section applies at all”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-192a-tds-on-premature-provident-fund-withdrawal-fifty-thousand-ten-per-cent-and-the-rule-8-gateway/ (validity last checked 2026-09-23)
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I pay a consultant, I pay an engineering firm for technical work, and I pay my company's non-executive director a sitting fee. Do I deduct two per cent or ten per cent on each, and does the fifty thousand rupee limit apply to all three?
My money is stuck. Every invoice I raise has tax deducted at the full rate, my actual tax for the year is far less than the deductions, and I only get it back a year later when the refund comes. Somebody told me to apply for a lower-deduction certificate under section 197. What does section 197 actually say — which payments does it cover, what does the Assessing Officer have to be satisfied about, what form do I file, and can the certificate be backdated to cover the deductions already made?
My income is below the taxable limit and I filed Form 15G, but the finance company says it cannot act on it without a PAN. Can section 206AA be applied to me?
My overseas vendor has no Indian PAN — must I withhold 20 per cent under section 206AA when the treaty caps the rate at 10 per cent?
