But there is a catch. EPFO allows withdrawal of PF before retirement but if you want to get the money before 5 years of account opening, then TDS (Tax Deduction at Source) is applied on the withdrawal amount. The PF withdrawal rules clearly state that if the EPF/PF account is attached with PAN, the TDS deduction rates stand at 10 percent while in the case of EPF accounts without PAN, the TDS rate stands at 20 percent.
But there are exceptions too. In a few cases, PF account holders can avoid TDS deduction while taking out money before five years of account opening.
Pankaj Mathpal, Founder & CEO at Optima Money Managers told Mint, “If the PF withdrawal amount is less than Rs 50,000, then there will be no TDS levied on one’s PF withdrawal. However, in case the PF amount withdrawn is above Rs 50,000 then the TDS becomes applicable if one’s annual income is more than Rs 2.5 lakh.”
You can also avoid TDS deduction even if the PF withdrawal amount is over Rs 50,000; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants told the website, “If the PF account holder’s annual income is below Rs 2.5 lakh, then, in that case, one can avoid TDS deduction by furnishing Form 15G or 15H.”