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Can linking Pf account with Pan save you from paying heavy Tds? How to create a link

EPFO has announced a new tax structure on FP dues above 2.5 lakh for private sector employees, while the threshold limit is set at 5 lakh for government employees.

In the meantime, on the above limit, the TDS will be applicable in the event of final PF settlement, transfer of claims on transfer from exempt establishments to EPFO, and vice versa.

One of the key factors to consider is the TDS rate that an employee will be paying. However, not everyone will have to pay TDS for their PF interest.

According to EPFO ​​guidelines, TDS if amounted to 5,000 will have no deduction for Indian residents, however, the member’s individual tax liability for their total tax will remain.

In addition, EPFO ​​states that if a PF account is linked to a valid permanent account number (PAN), the TDS rate will be 10%. However, if not linked to a valid PAN, the TDS rate is doubled to 20%.

In this case, if your PAN is not updated or not linked to your PF account, you simply pay double the TDS rate compared to a normal rate of 10%.

Under Section 206AA of the Income Tax Act, each taxpayer who receives taxable income must provide their PAN to the payer (EPFO) of that income.

In particular, one can request a TDS return by filing income tax forms 26 Q and 27 Q. The deadline for filing a TDS statement is for the first quarter (April to June) no later than July 31 of the financial year; the due date is October 31 for the second quarter (July to September); while January 31 is the due date for the third quarter (October – December); and May 31 is set as the deadline for filing TDS returns for the fourth quarter (January – March) of a financial year.

If TDS declarations are not filed, EPFO ​​indicates that a penalty of 200 are taken for each day the failure continues. However, the amount of the charges will not exceed the amount of the TDS. The TDS statement filing fee dates are the same as the TDS statement filing periods.

The new guidelines came into effect on April 1, 2022.

Here’s how to link your PF account to PAN:

First of all, it should be noted that your PF number is also called UAN (Universal Account Number). You can use your Aadhaar or PAN number to know your UAN which will help you to login to your PF account to check your balance, passbook, ranking and other key account details.

To link your PF account to PAN, you need to follow a few simple steps.

Step 1: The first step is to visit your EPFO ​​UAN member e-Seva portal and login using your UAN number along with your password. A captcha code will be given below the password, you must add the exact unique code in a box below for successful login.

Step 2: Once logged in, click on the “Manage” section available in the main menu.

Step 3: In the “Manage” section, click on KYC. You will be directed to a page with options to add your personal information such as bank account, PAN, Aadhaar, passport, driver’s license, electoral card, ration card and national population register.

Step 4: You need to select the PAN section and add your unique PAN number. Be sure to enter your name as it is printed on the PAN card and click save.

Step 5: If your name and number match the records from the IT department, your PAN is verified automatically. Once your PAN is successfully linked to your PF account, you will find the PAN information in your “Member Profile” table.

The new TDS structure applies to the aforementioned threshold for public and private sector employees on their contributions for the previous year 2021-22 and subsequent previous years. Also, the TDS will be applicable in the event of death as it is for a living member. Also, the TDS is the same for international workers as it is for Indian workers.

The latest provisional data from the Ministry of Labor and Employment released last month shows that the EPFO ​​added 15.29 lakh net subscribers in January 2022. Of the total, about 6.65 lakh net subscribers exited but joined EPFO by continuing their EPFO ​​membership instead of opting for permanent withdrawal. The payroll data also reflects a downward trend in the number of members leaving since July 2021.

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