How Does The TDS On Employees’ Provident Fund Scheme Change After Budget?

At present the TDS rate on withdrawal of taxable component from Employees' Provident Fund Scheme in non-PAN cases is 30 per cent. The Union Budget 2023-24 has proposed to reduce it to 20 per cent, as in other non PAN cases.

It is important to note that there is no change in TDS or tax rates for employees who have already submitted their PAN cards. The current rules stipulate that is no tax payable if you withdraw your provident fund after 5 years of continuous service and if you have submitted your PA N card. There is no change in the same. In fact, if there is no 5 years of continuous service and you are in a private employment you are liable to pay tax.

"Higher TDS/TCS rate applies, if the recipient is a non-filer i.e. who has not furnished his return of income of preceding previous year and has aggregate of TDS and TCS of Rs 50,000 or more. It is proposed to exclude a person who is not required to furnish the return of income for such previous year and who is notified by the Central Government in the Official Gazette in this behalf," the Finance Minister stated in other tax related announcements.