What if linking your PAN saves you 50% in Taxes paid?
That's true. It does apply in one special case. The EPF.
The statutory body, EPFO has introduced fresh guidelines for taxation and deductions on the employees' retirement accounts. EPFO directs that tax deducted at source (TDS) will be implied on the date of the credit of interest on provident fund accounts if they are not in final settlement or transfers.
EPFO has announced a new tax structure on PF contributions above ₹2.5 lakh for private-sector employees, while the threshold limit is set at ₹5 lakh for government employees.
Paying DOUBLE Taxes?
As per EPFO guidelines, TDS if amounted to ₹5,000 will have no deductions for Indian residents, however, the member’s individual tax Liability towards his total tax shall remain.
Further, the EPFO states that if a PF account is linked with a valid Permanent Account Number (PAN), the TDS rate will be 10%. However, if not linked with a valid PAN, then the TDS rate gets doubled to 20%.
In that case, if your PAN is not updated or not linked with your PF account, you simply pay double the TDS rate than a normal 10%.
Under section 206AA of the Income Tax Act, every taxpayer who receives taxable income needs to furnish their PAN to the payer (EPFO) of such income.
How to Claim your TDS?
As per EPFO guidelines, TDS if amounted to ₹5,000 will have no deductions for Indian residents, however, the member’s individual tax Liability towards his total tax shall remain.
Further, the EPFO states that if a PF account is linked with a valid Permanent Account Number (PAN), the TDS rate will be 10%. However, if not linked with a valid PAN, then the TDS rate gets doubled to 20%.
In that case, if your PAN is not updated or not linked with your PF account, you simply pay double the TDS rate than a normal 10%.
Under section 206AA of the Income Tax Act, every taxpayer who receives taxable income needs to furnish their PAN to the payer (EPFO) of such income.
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