TDS Rate on EPF Withdrawals

Proposal to reduce the TDS rate from 30% to 20%

GOVERNMENT OF INDIA
MINISTRY OF LABOUR AND EMPLOYMENT
LOK SABHA
UNSTARRED QUESTION NO. 1878
TO BE ANSWERED ON 13.03.2023

TDS RATE ON EPF WITHDRAWALS

  1. SHRI JAGDAMBIKA PAL:
    SHRI VINCENT H. PALA:
    Will the Minister of LABOUR AND EMPLOYMENT be pleased to state:

(a) whether the Government has reduced TDS rate on EPF withdrawals for the individuals in the Union Budget 2023-24 , if so, the details of benefits of pensioners through such step;

(b) whether the membership of EPFO has increased rapidly during the last three years, if so, details thereof; and

(c) whether the Government has taken any steps to provide benefits to the pensioners under EPFO, if so, the details thereof?

ANSWER
MINISTER OF STATE FOR LABOUR AND EMPLOYMENT (SHRI RAMESWAR TELI)

(a): In the Finance Bill, 2023, there is a proposal to reduce the Tax Deduction at Source (TDS) rate from 30 per cent. to 20 per cent. on taxable portion of Employees’ Provident Fund withdrawal on non Permanent Account Number (PAN) cases.

(b): The membership of Employees’ Provident Fund Organisation (EPFO) has increased during the last three years as reflected below:

(c): Yes, Sir. The Government has, inter-alia, taken following steps to provide benefits to the pensioners under Employees’ Provident Fund Organisation (EPFO) :-

(i) The Government of India provides contribution of 1.16 per cent. of wages limited to Rs.15000/- of Employees’ wages.

(ii) The Government, provides a minimum pension of Rs. 1,000/- per month to the pensioners under the EPS, 1995 by providing budgetary support, which is in addition to the budgetary support of 1.16 per cent. of wages provided annually towards EPS to EPFO.

(iii) The Government has increased wage ceiling for coverage from Rs. 6500/- to Rs. 15000/- w.e.f. 01.09.2014 under Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 notified vide G.S.R. No. 608(E), G.S.R. No. 609(E), and G.S.R. No. 610(E), dated 22.08.2014. This has increased pensionable salary and hence the pension for EPFO pensioners.

(iv) The Government vide Notification G.S.R. No. 132(E) dated 20.02.2020 has allowed restoration to normal pension after completion of fifteen years from the date of such commutation, in respect of those members who availed the benefit of commutation of pension under the erstwhile paragraph 12A of this Scheme, on or before the 25th day of September, 2008.

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