The rule for Provident Fund (PF) withdrawal is changed for non-PAN cases. The new rule is applicable if money is withdrawn before five years of the account opening for non-PAN holders.
In addition to this, the whole withdrawal amount will remain taxable and PF contributions above Rs.2.5 lakhs per annum would also remain taxable.
The Honorable Union Finance Minister Smt Nirmala Sitharaman said, “At present, the TDS rate on withdrawal of taxable component from Employees’ Provident Fund Scheme in non-PAN cases is 30 percent.”
“It is proposed to reduce it to 20 percent, as in other non-PAN cases”, Smt Nirmala Sitharaman added.
Additionally, Smt Nirmala Sitharaman has also proposed to hike tax exemption on leave encashment on the retirement of non-government salaried employees to Rs. 25 lakhs from Rs. 3 lakhs.
The revenue secretary Sanjay Malhotra said, “The Rs. 22 lakh benefit at 30% plus works out to almost Rs. 7 lahks”.
Sanjay Malhotra said if one spread the exemptions for over 30-35 years, it works out to more than Rs. 20,000 a year.
Honorable Union Finance Minister Smt Nirmala Sitharaman presented the Union Budget 2023-24 on February 1, 2023, in parliament.
The other key highlights of the Budget 2023.
- Finance Minister Nirmala Sitharaman upped the rebate limit for paying income taxes to Rs 7 lakh/annum.
- The tax exemption limit has been increased to Rs 3 lakh.
- The new applicable tax rates hold zero taxes for those earning upto Rs. 3 lahks, 5% for Rs. 3-6 lakhs, 10% for Rs. 6-9 lakhs, 15% for Rs. 9-12 lakhs, 20% for Rs. 12-15 lakhs and 30% for Rs. 15 lahks and beyond.
- Railways accorded its highest-ever capital outlay: highest ever at Rs. 2.40 lakh crore.
- The agriculture credit target would be raised to Rs. 20 lakh crore with a focus on animal husbandry and fisheries.
- Setting up an Agriculture Accelerator Fund to encourage agri-startups by young entrepreneurs in rural areas.
- The agriculture credit target would be raised to Rs. 20 lakh crore with a focus on animal husbandry and fisheries.
- The budget provided Rs. 35,000 crores for priority capital investments towards achieving energy transition and net-zero objectives as well as energy security by the Ministry of Petroleum and Natural gas.
