EPF Tax rules: Non-resident account holders must pay applicable cess, surcharge on TDS deductions at these rates, cess on TDS, surcharge on TDS, TDS on EPF withdrawal, EPF contribution
If you are a non-resident member of the Employees’ Provident Fund Organisation (EPFO) then your TDS (Tax Deducted at Source) will be liable for surcharge and cess. The applicable cess on the TDS will be charged at the rate of 4 per cent.
Surcharge will be charged at the following rates:
No surcharge on interest income up to Rs 50 lakh
10 per cent surcharge on interest income between Rs 50 lakh and Rs 1 cr.
15 per cent surcharge on interest income between Rs 1 cr and Rs 2 cr.
25 per cent surcharge on interest income between Rs 2 cr and Rs 5 cr.
37 per cent surcharge on interest income between Rs 5 cr and Rs 10 cr.
15 per cent surcharge on interest income between over Rs 10 cr.
The surcharge and cess rates are applicable for financial year 2021-22 (April-March) i.e. for Assessment Year 2022-23. The information is present on the EPFO website.
Applicable TDS for Non-resident account holder:
If the PF account is linked with a valid PAN, rate of TDS will be 30 per cent or tax rate specified in the Double Taxation Avoidance Agreement (DTAA) whichever is beneficial to the PF member. This is applicable under Section 195 read with Section 90 of the Income Tax Act.
For a non-resident account holder, TDS will be deducted at applicable rate on all amounts. For resident account holders, an exemption is give on TDS deduction if the TDS amount is up to Rs 5000.
TDS must be deposited using Challan ITNS-281.
EPFO is one of the World’s largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken according to claims made by the website. At present it maintains 24.77 crore accounts (Annual Report 2019-20) pertaining to its members.