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.
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.
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.
CAclubindia
