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
CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
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.
