In order to avoid excess withholding tax (TDS), all employees must immediately link their permanent account number (PAN) to the EPF. For failing to complete the required paperwork, employees will be charged double the normal TDS rate.
In case your PAN is linked to your EPF account, then the TDS will be deducted at a rate of 10%. On the other hand, in order not to link your PAN to the EPF account, a TDS of 20% will be deducted.
According to a circular issued on April 6, “For each day the blackout continues, you will be charged Rs. 200. Late penalties, on the other hand, must not exceed the amount of the TDS.”
Each taxpayer who receives taxable income is required, under article 206AA of the IT law, to provide his PAN to the payer (EPFO).
The circular also noted that if the PAN is not linked to the PF account, tax will be deducted at the following rates (whichever is higher):
(i) at the rate specified in the relevant provision of Section 206AA of the Information Technology Act; or
(ii) at the prevailing rate or rates; or
(iii) at the rate of twenty percent: (Ref. Section 194 A read with Section 206 AA of the Income Tax Act).
Here is how to link your PAN to your EPF account:
Step 1: Login to the EPFO portal with your UAN ID
Step 2: Under the “Manage” tab, click on the KYC option
Step 3: You will come to a new page when you link PAN to the EPF account
Step 4: Enter your name and PAN. And save.