In tax year 2026-27, the authorised payer under the Employees' Provident Funds Scheme pays an employee a taxable accumulated balance of ₹75,000. The employee has given a valid PAN. At what rate is…
Question and options
In tax year 2026-27, the authorised payer under the Employees' Provident Funds Scheme pays an employee a taxable accumulated balance of ₹75,000. The employee has given a valid PAN. At what rate is tax deducted under section 392(7) of the Income-tax Act, 2025?
10%
2%
5%
20%
Answer and explanation
Correct answer: A - 10%
Section 392(7) requires the trustees or authorised payer of the Employees' Provident Funds Scheme to deduct tax at 10% when the taxable accumulated balance paid is ₹50,000 or more. ₹75,000 crosses that limit, and with a valid PAN the ordinary 10% rate applies; a higher rate is a consequence of not furnishing PAN.
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