TDS On Interest: Here's Why You Should Link PF Account With PAN. Check Steps To Link

If a PF account is linked with a valid Permanent Account Number(PAN), the TDS rate will be 10 per cent. In case it is not linked with a valid PAN, then the TDS rate gets doubled to 20 per cent

Indian rupee notes with a smart phone calculator and Notepad (Getty Image)

New Delhi: In a latest guideline issued by the Employees' Provident Fund Organisation (EPFO), the statutory body has implemented a new tax structure on PF contributions above Rs 2.5 lakh for private-sector employees, while the threshold limit is set at Rs 5 lakh for government employees.

Going by the circular issued on April 6, TDS on interest earned on excess contributions will be effective from April 1, 2022. TDS will be deducted at the time of credit of interest in the EPF account. In case of a pending final settlement or transfers, then TDS will be deducted at a later date in the case of the final settlement.

Also note that if TDS is amounted to Rs 5,000, then there will be no deductions although the member's individual tax liability towards his total tax shall remain.

Moreover, the EPFO also mentioned if a PF account is linked with a valid Permanent Account Number (PAN), the TDS rate will be 10 per cent, according to the publication Mint report. In case it is not linked with a valid PAN, then the TDS rate gets doubled to 20 per cent, as per the report.

It means that if your PAN is not updated or not linked with your PF account, you end up paying double the TDS rate than a normal 10 per cent.

All taxpayers under section 206AA of the Income Tax Act, who receives taxable income needs to furnish PAN to the payer (EPFO) of such income.

In this case, you can claim a TDS return by filing forms 26 Q and 27 Q of Income Tax. Also, note that the due date for filing a TDS return for the first quarter (April to June) is July 31st of the financial year; the due date for the second quarter (July to September) is October 31; while January 31 is the due date for the third quarter (October - December). Lastly, May 31 remains the last date for filing TDS returns for the fourth quarter (January - March) of a financial year.

If you have have failed to file TDS returns in time, a penalty of Rs 200 is levied every day during which the failure continues. However, note that the amount of fees shall not exceed the amount of TDS, as per the EPFO. 

Check steps to link PF account with PAN:

Step 1: Firstly, visit EPFO UAN Member e-Seva Portal and then log in using your UAN number and password. You will find a captcha code below the password which needs to be added to the exact unique code in a box below it for successful login.

Step 2: After logging in, go to the 'Manage' section from the main menu.

Step 3: Under the 'Manage' section, just click on KYC. This will direct you to a page where you need to add your personal information including bank account, PAN, Aadhaar, passport, driving license, election card, ration card, and national population register.

Step 4: You should select the PAN section, and add your unique PAN number. Ensure to enter your name as printed on the PAN card and click save.

Step 5: Once your name and number matched with the IT department records, then your PAN is verified automatically. Once the PAN is successfully linked with your PF account, you can find the PAN information in your 'Member Profile' table.