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Tds on interest component on pf, while transferrin the pf

TDS 1371 views 3 replies

I had got my PF transferred from my earlier employer to my new employer. While tranferring the PF, my earlier organisation has decuted TDS on the interest component which accrued to me during the period of Date of Leaving till Date of transfer. The amount of interest during this period (Date of Leaving - Date of Transfer) was less than INR 10000. 

Is this treatment correct. As per my earlier organisation, they mentioned that this has been done basis Section 194A.

Replies (3)

Interest on PF is exempt upto 8.50%. It is taxable after 8.50%. Since the interest is below 10000/-, it should not be deducted. 

on the other hand, interest on pf is not paid by your previous employer, he jst transfer the account to new company. Interest is paid by bank, so if it is deductable, TDS should be deducted by the bank.

@ Nitin - thanks for the revert. I had left my earlier organisation in August 2012 and got the PF transfer to my new organisation in October 2012. There was interest accrued for this period I.e. date of leaving till date of transfer. This interest together with the earlier balance was transferred to my new organisation. My earlier organisation deducted TDS on this interest component. The interest for the period ( date of leaving till date of transfer) bein around 8700. Should TDS have been deducted. If not what can I do now. Also since I have to submit my income tax return now, do u consider the interest amount, on which TDS has been deducted, as income for the year.

Hi shrenikk,

if interest amount is upto 8.5% rate, u should claim it as exempt income and claim the amount of TDS as refund in ITR.

 


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