What is form 13?
When paying the payee, the deductor/payer deducts tax. And the deductee/payee asserts this when filing an ITR using Form 26AS. Sometimes a payee's overall tax obligation is less than the TDS taken from his income. Additionally, he doesn't want to wait until the end of the year to request a tax refund that was withheld.
In these circumstances, the payee may submit a Form 13 request to his Assessing Officer for a non-deduction or lower tax deduction following Section 197. (AO). For each fiscal year, a separate Form 13 must be filed. The deductor must also get the equivalent compensation for lesser or non-deduction of TDS/TCS.
Rahul works as a freelancer and has received payment for a job with a business. The business spent Rs. 5,00,000 in fees. He receives no other income for the fiscal year 2019–20. When paying fees, the company will deduct TDS at 10%. Since a rebate of Rs. 12,500 is given on earnings up to Rs. 5,00,000 in FY 2019–20, in this case, his total tax burden is zero. As a result, Rahul may submit a Form 13 online application for a lesser or non-deduction of TDS.
When Should a Form 13 Application Be Submitted?
The payee may submit a request at any time during the fiscal year. However, applying for the start of the year is a good idea for income received all year long.
Who May Submit a Form 13 Application?
A payee or taxpayer may submit an application to the Assessing Officer (AO) for a certificate authorizing no or little TDS/TCS deductions. The salaries above are eligible for applications:
- Salary, Dividend, Interest, Contactors, Insurance, Commission, Brokerage, Commission, Lottery Prize, Commission, Remuneration, Rent, Professional/Technical Fees
- NRI Earnings u/s 195
- Payment for the purchase of moveable property Income from investment fund units
- Income from a securitization trust investment
Note: For any interest on FDs or interest other than interest on securities, submit Form 15G/15H.
Provident fund is one of the most advantageous and well-liked investing options made available by the government to paid people in both the public and commercial sectors. A pool of money called a provident fund is generated by setting aside a tiny portion of each monthly paycheck and depositing it with the Employees Provident Fund Organization of India. Individual contributions made in this manner are annually subject to compound interest. All Indian businesses with 20 or more employees are required to register with the Employees Provident Fund Organization.
Provident Fund Calculation Based on Salary
The Provident Fund was established to promote saving a portion of one's income for stability and security. Once an individual begins working as an employee at any institution, they may begin making contributions to the Provident Fund.
Every month, a portion of the salary is paid into the Provident Fund. The accumulated PF corpus can be accessed by the persons in the case of retirement or if they become medically unfit to work.
Let's examine the formula used to determine the Provident Fund based on salary. Before comprehending the calculations, the two most crucial considerations are as follows:
- Account for employee provident fund (EPF): The funds from both employer and employee contributions are combined in this provident fund account.
- Employee Pension Scheme is referred to as an EPS account. The company only contributes a small amount to this account of the overall portion that is required to be provided by the employer.
The provident fund portion taken out of the pay is 12%. Accordingly, 12% of the Provident Fund account comprises employer and employee contributions. It's vital to remember that while the company only contributes 3.67% of an employee's salary to the EPF account, the remaining 8.33% goes to the employee's EPS account. The employee contributes 12% of his salary to the EPF account. Thus, the 12% total payment from the employer is divided into two parts: 3.67% goes to the account for the employee provident fund, and the remaining 8.33% goes to the account for the employee pension scheme.
Documents Needed to Transfer EPF
Employees must consider the following before asking for a PF transfer:
- UAN is active on the EPF portal.
- IFSC code and bank account number are among the seeded bank information.
- The employer should confirm the bank information.
- The UAN account should have Aadhaar planted, and the employer should have accepted e-KYC.
- The portal should include the employee's hire date, departure date, and reason for leaving the position.
- EPFO only allows one transfer request per member id.
Form 13 is necessary for the automatic transfer of EPF. It requires that authorized signatories of the current and previous employers be digitally registered in the EPFO PF account numbers of both the current and previous positions.
Online PF Transfer Procedures
- Both your previous and present employers need to have their digital signatures registered with EPFO for document verification and attestation before beginning the online process for transferring Provident Fund from one employer to the other.
- The online funds' transfer is still possible even if one of your current or former employers has a digital signature.
- You may quickly determine if your employer is registered with EPFO by doing an eligibility check on your employer at www.epfindia.gov.in.
- Run the eligibility check, then sign up for a member account on the portal.
- Fill out the EPF transfer claim form now.
- The following information is required to complete the EPF transfer claim form:
- Account numbers for both employers' EPFs
- information such as the date of joining and quitting date of employment in the past
- Date of employment with the present company
- Information about the bank, including the account number, name, branch, and IFSC code. You must provide these details if you want to withdraw money.
- The EPFO will automatically fill in your prior employer's name and provide information about the regional provident fund office that manages the account when you enter the EPF account number of your former employer.
- The EPFO needs that you enter the employee's date of birth to verify the identity of the person making the online transfer. If you enter incorrect information three times, the EPFO will ban you and prevent you from carrying out an online Provident Fund transfer.
- Choose one of the employers to validate and attest your papers after completing the EPF Transfer Claim form. Be aware that the PF transfer procedure would move quickly if the prior employer completed the attestation.
- After choosing the employee, print the form and deliver it to the employer you choose for attestation.
- You can examine and submit the full form on the next page.
- Take a printout of the form, sign it, and give it to the employer for their records after the final submission. To avoid the employer rejecting your transfer request, you must submit the form within 15 days.
Suppose the employer manages the transfer request effectively and is not concerned about process openness. In that case, the procedure above is swift, efficient, and effective quickly.
Methods for Moving EPF Balance
Although the EPFO has introduced new techniques to speed up the procedure, the current method of transmitting PF has not yet been eliminated. Members may transfer their EPF balance in one of the following ways:
PF Transfer Offline Channel
When transferring EPF funds offline, the member must carefully fill out the printed form (form 13) and deliver it to their present employer.
- The current employer submits and passes the information to the EPF office. The EPF office forwards the application to the applicant's former employer for attestation and verification.
- The EPF office transfers the money from the prior EPF account to the new EPF account upon receipt of a verified & attested copy from the prior employer.
- The candidate does not have to provide their UAN or Aadhaar card number while transferring funds offline.
- The EPFO issues UANs, which serve as a single identification number for various employee IDs.
Options for Transferring PF Funds Online-
You can transfer the PF balance online in one of three ways:
- Online Transfer Claim Portal (OTCP): No UAN, Aadhaar Card, or other documentation is needed to use the Online Transfer Claim Portal. The Online Transfer Claim Portal is used for the procedure mentioned above.
- One Employee, One EPF Account was created to eliminate confusion caused by EPFO members having multiple accounts with the same employee's information. With "One Employee, One EPF account," EPFO seeks to combine all of the member's existing EPF accounts into a single entity. The members' ability to request several EPF transfers helps achieve this.
- The Automatic EPF Balance Transfer technique is appropriate when transferring funds from a recently opened EPF account because it requires a UAN number, which is readily available with new accounts. The applicant doesn't need to take any specific action to transfer PF using this approach. As soon as the new employer punches the UAN into the system, it is transferred.
EPF Transfer Status
Unlike physical applications, PF transfer applications submitted online allow employees to readily monitor their applications' status.
Either the Online Transfer Claim portal or the EPFO website's "EPF Claim status check" page can be accessed to verify the status of an online transfer claim. The applicant can use the EPF Grievance Portal to determine the precise transfer claim status if they are unhappy with the service or the status.
Advantages of the Provident Fund
The government established the Provident Fund to encourage employees to make investments. Numerous more advantages of Provident Fund can be found in addition to retirement savings.
- Compound interest from investments in PF accounts guarantees money growth.
- Employees who have PF accounts are free from paying taxes on interest earned.
- After 5 years of continuous service, withdrawals from PF accounts are not subject to tax payments.
- Under certain circumstances, employees are given the option of pre-withdrawing from their PF corpus.
- According to the Employees' Pension Scheme of 1995, employees are eligible for a lifetime pension.
- Members of the PF account are also granted several insurance advantages under the Employees Deposit Linked Insurance scheme as an EPFO cover.
- The application will be sent to the proper TDS assessing officer depending on the applicant's info in FORM 13.
- The Assessing Officer would produce the certificate after verifying the information/details provided in FORM 13 and receiving approval from the authorized authority.
- Since the certificate will be generated automatically, the signature is not necessary. Through their TRACES login, the applicant & the deductor can get the created certificate.
Frequently Asked Questions (FAQs):
Q. What is a certificate for a lower TDS deduction?
The certificate for lower deductions or no deductions under Section 197 is given to the deductor by the deductee. After providing the necessary information in Form 13 to the Assessing Officer (AO), it may be retrieved by the deductee.
Q. What happens if the employer doesn't take TDS?
The actual tax paid might not be enough to meet your entire tax due if the employer doesn't deduct the tax. Additionally, a fine under section 221 must be paid.
Q. What rate should the deductor deduct TDS?
The deductor must withhold TDS at the appropriate rate. However, suppose the deductee provides a certificate for a lesser or no TDS deduction. In that case, it shall be deducted at a lower rate.
Q. What is the difference between TDS & TCS?
Both TDS & TCS are considered income taxes.
- Tax Deducted at Source (TDS): A person making a specific type of payment is required to deduct tax & deposit it to the government under the taxation procedure known as TDS. The rate at which TDS is withheld and paid depends on the payment's nature and is mentioned. The TDS must be deducted and deposited by the person making the payment.
- Tax Collected at Source (TCS): When a sale is made, TCS is obtained from the buyer by the seller. Any seller who sells a specific item must charge the customer tax at a set rate at the time of the sale. The vendor is required to deposit this TCS with the government.
Q. How do I submit my online PF Form 13?
Download the transfer claim and complete Form 13 with the necessary information, including the PF numbers from your present and prior employers (pdf format). Within 10 days, provide the physical, signed copy of the electronic PF transfer claim application to the workplace of your choice.
Q. What is form 13 for?
The technology allows users to save the transfer claim form (Form-13), which is printable. To complete the claim filing process, the member must print off Form 13 from the printable PDF file, sign it, and deliver it to the employer of their choice.
Q. Is form 13 required for a former employer?
A member must always submit Form 13 when switching employers to move their PF account from their old employer to their new workplace (R). Alternatively, the member may submit a transfer request online by accessing the EPFO portal using a valid UAN and password.
Q. What occurs if you don't transfer your PF to the new employer?
Therefore, the amount received from the prior company, including any interest generated, will become taxable upon withdrawal if the work with the previous organization is shorter than 5 years & you do not shift the PF account to the new employer.
Q. What role does UAN play in PF transfers made online?
The Universal Account Number serves as a catch-all for the many member IDs given to a person by several employers. Multiple EPF accounts (member IDs) assigned to a single member can be linked via UAN. A variety of services are provided by UAN, including a dynamically updated UAN member card, an updated PF passbook with all transfer-in information, the ability to link the PF IDs of former members with those of current members, monthly SMS updates on contributions to the PF account, and the ability to automatically initiate transfer requests upon changing jobs.
Is the date of departure from a former work or employment required when applying for a transfer online? What conditions must be met before the leaving date can be updated?
Yes, updating the date you left your former job or employment is required when filing for a transfer online. Only when two months have passed since quitting a job is the date of exit updatable. Additionally, the departure date may be any day of the month on which the previous employer paid its final contribution. The facility uses a one-time password based on Aadhaar (OTP). As a result, only individuals who have activated their UAN linked it to a verified Aadhaar number and have a mobile device linked to their Aadhaar to receive the OTP given for verification can