Link EPF And PAN To Avoid Excess TDS To Adhere To New Rules

EPF or Employees Pension Fund administered by the EPFO is the social security scheme that aims to meet the financial needs during one's retirement years. The scheme purposely devised for formal sector employees includes contribution both from the employee as well as the employer. The employee's 12% basic pay and dearness allowance is deployed to the account on a month on month basis and a similar contribution is made by the employer.

Link EPF And PAN To Avoid Excess TDS To Adhere To New Rules

New guidelines on EPF taxation and deductions in April 2022

At the beginning of the fiscal year 2023 i.e. in April this year, the EPFO came up with new guidelines on taxation as well as deduction on EPF. For private sector employees, the PF administration body came up with new tax structure on EPF contribution over Rs. 2.5 lakhs.

Further as per the circular issued, TDS shall be deducted at 10% if the EPF account is linked to a valid PAN and if the same is not adhered to TDS rate would become double of the regular rate i.e. 20%. So, to avoid too much of tax deduction as TDS better link your EPF and PAN. As per the Section 206AA of the Income Tax Act every taxpayer receiving taxable income need to furnish their PAN.
Also, note TDS implications shall be the same in case of death cases too.

How to link EPF to a valid PAN?

Step 1: Go to the EPFO portal, login with your EPFO credentials UAN and password
Step 2: After successfully loggin in, go to the Manage tab and under that click KYC
Step: 3 In the third step a new page shall open where you can add your PAN
Step 4: After you provide your PAN, click on the check box saying "I hereby consent to provide my Aadhaar Number, Biometric and/or One Time Pin (OTP) data for Aadhaar based authentication for the purpose of establishing my identity". Next click on save.
Step 5: For authentication an OTP shall be sent to your registered mobile number

Note once you have seeded PAN and EPF - it is to be approved and digitally signed by the employer. And it shall be invalidated automatically, if not approved by employer within 60 days of seeding date.

In case PAN is successfully seeded and verified by the department it shall reflect under the EPFO account's member block.

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