Simplification of Tax Deduction at Source (TDS) mechanism for Employees Provident Fund Scheme (EPFS)

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Question - What are the provisions regarding the taxation of pre-mature withdrawal from EPFS in Finance Bill 2015 ?

AI Summary

Finance Bill 2015: New TDS Rules for Early Provident Fund Withdrawals; 10% Tax Over 30,000, PAN Essential The discussion addresses the simplification of the Tax Deduction at Source (TDS) mechanism for the Employees Provident Fund Scheme (EPFS) as proposed in the Finance Bill 2015. It highlights that pre-mature withdrawals from Recognised Provident Funds (RPF) will be taxable if made before five years of continuous service, except for specific circumstances. A new provision suggests a 10% TDS on such withdrawals, with a 30,000 threshold for applicability. Employees can file a self-declaration to avoid TDS if their income is below the taxable limit. Non-furnishing of a Permanent Account Number (PAN) will result in TDS at the maximum rate. These changes are effective from June 1, 2015.