Hello Friends,
Can anyone help me with this IT query.
Exempted Trust PF withdrawal taxed at highest marginal rate instead of 10% inspite of providing PAN, Aadhaar and necessary documents. Under section 192A and 192 cumulatively. I have withdrawal the PF amount after 5years from the date of resignation. Amount is greater than 50000 and less than 140000.
When checked with the company they say that exempted PF trust has saparate rules and says section 192(4), subrule (1) 9 of part A and 10 of part A, schedule IV of IT act 1961 etc....
My question is simple, I am not asking why TDS has been deducted but the rate at which it is deducted. I agree Exempted PF Trust will have there own rules but still it is governed by one Income Tax Act rules whether it is exempted or otherwise.
IT rules on PF withdrawal
According to the Income Tax Act, if a person is withdrawing less than Rs. 50,000 then TDS shall not be deducted. However, if the withdrawal is more than Rs. 50,000 then it is compulsory for the assessee to furnish his PAN number.
If you are not liable to pay tax even after the addition of the withdrawal amount then you can furnish Form 15G/ 15H along with your PAN number and the TDS will not be deducted.
But if you fall in the tax bracket then you cannot give Form 15G/ 15H, and since PAN is mandatory, upon submitting the PAN, a TDS at the rate of 10% shall be deducted.
However, if you fail to furnish your PAN number, and your withdrawal is more than Rs. 50,000 then the TDS will be deducted at a whooping 34%.
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