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TDS deducted by EPFO under wrong section

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K.G.Shah

M.Com

124 Points Posted on 29 June 2026

Hello Sir,

We the Senior citizen got Higher Pension Arrears from EPFO of last 10 Years . (Approx 10 to 20 Lakh). EPFO has deducted 10 % TDS. However while depositing TDS , EPFO has deposited u/s 192 A. In AIS it sh:ows Recipt of Accumulated Balance due to employee" which is factually incorrect. Since we wants to claim relief u/s89 , EPFO should show as pension arrears u/s 192. We have given representation to EPFO, but they are reclutant to modify. If we filed return and claim u//s 89 relief whether it will create any Problem ? 2) Secondly in Pune Region EPFO has not yet deposted TDS towards arrears paid and TDS deducted before 31st March. Whether the employees show income in next year, it will create any problem? arrears actually received in FY 2025-26. TDS amount is average 1.50 Lakh. If they show income , Tax will have to pay TAX in FY 2025-26 and Next year they will have to claim refund . Representation given to EPFO, but no positive resposne. What is remedy for us.

Replies (1)

Aashok Kumar Sharma

Finance/Compliance Consultant

62255 Points Posted on 29 June 2026

✅ Higher pension arrears are taxable under Salary, and Section 89 relief is available if the conditions are satisfied.
✅ Deduction of TDS by EPFO under Section 192A instead of Section 192 is a reporting error by the deductor and does not, by itself, deprive the taxpayer of Section 89 relief.
✅ The incorrect AIS descripttion (“Receipt of accumulated balance due to employee”) does not change the true nature of the income.
✅ Pension arrears received in FY 2025-26 must be taxed in FY 2025-26, even if EPFO deposits the TDS later.
⚠️ If the TDS is not reflected in Form 26AS due to delayed filing by EPFO, immediate credit may not be available. The taxpayer should pursue EPFO to upload/correct the TDS statement and then obtain the credit through the prescribed revision or rectification mechanism.