# Section 192A – Premature Withdrawal from Employees' Provident Fund

## 1. Applicability

TDS is required when an employee makes a premature withdrawal (before completion of continuous service of 5 years) from a Recognised Provident Fund (EPF).
Such withdrawal becomes taxable in the hands of the employee.

## 2. Threshold Limit

## 3. Payer & Payee

Party	Description
Payer	Trustees of the EPF Scheme or any authorised person under the Scheme
Payee	Individual employee (member)

## 4. Rate of TDS

10% on the taxable portion of premature withdrawal.
If the employee does NOT furnish PAN: Tax to be deducted at MMR (without the relaxation in this clause).

## 5. Time of Deduction

## Snapshot

```

When : Service < 5 yrs + Withdrawal ≥ ₹50,000

Payer : EPF Trustees / Authorised person

Rate : 10% on taxable amount (MMR if no PAN)

Timing : At time of PAYMENT

```

Worked example

### Example 1

Example 1 – Below threshold:

Mr. R withdraws ₹45,000 EPF balance after 3 years of service. No TDS u/s 192A since amount < ₹50,000.

### Example 2

Example 2 – Above threshold:

Ms. S withdraws ₹2,00,000 of taxable EPF balance after 4 years of service. PAN is furnished.

### Example 3

Example 3 – No PAN:

Mr. T withdraws ₹1,50,000 taxable PF after 2 years without furnishing PAN.

⚠️ Common exam mistakes

Applying TDS even when continuous service is ≥ 5 years – such withdrawal is exempt and no TDS applies.
Computing TDS at 10% on gross withdrawal instead of TAXABLE component.
Forgetting that absence of PAN triggers MMR rate for 192A.
Treating the threshold as ₹2,50,000 (basic exemption) – correct threshold is ₹50,000.

Reference: 192A

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Section 192A – TDS on Premature Withdrawal from EPF

Worked example