Section 192A – TDS on the accumulated balance of a provident fund

Section 192A was introduced in the year 2015 for deduction of TDS on the accumulate balance of a provident fund.

“Payment of accumulated balance due to an employee.—Notwithstanding anything contained in this Act, the trustees of the Employees’ Provident Fund Scheme, 1952, framed under section 5 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or any person authorized under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognized provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent”

In simpler words, any person on being making payment of accumulated balance of provident fund shall deducted TDS at the rate of 10%.

Provided that no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than thirty thousand rupees. If the value of such payment is less than INR 30,000 say INR 20,000 then no TDS shall be required to deducted.

Provided further that any person entitled to receive any amount on which tax is deductible under this section shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate. In simpler words, PAN number needs to be provided to deductor to avoid deduction of TDS at the higher rate.

CA Akash Arora

Akash Arora is a Chartered Accountant by profession. He has over 6+ years of experience w.r.t  Goods and Service Tax (GST) compliances, litigations and managing routine GST issues.

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