World Bank CEO Kristalina Georgieva pegs India’s GDP growth rate at 7% for 2016-17, says ongoing reforms, GST implementation augur well for the economy
The government’s decision to ban high-value banknotes as part of efforts to stamp out corruption will have a profound and positive impact on India’s economy, World Bank chief executive Kristalina Georgieva said.
Demonetisation may have caused some hardship to people living in the cash economy but in the long run the move will help foster a clean and digitized economy, Georgieva said.
“What India has done will be studied (by other countries). There hasn’t been such demonetisation in a country so big,” Georgieva told Hindustan Times in an interview late on Wednesday.
The World Bank CEO’s appreciation for the 8 November move which banned Rs500 and Rs1,000 bills, comes after the International Monetary Fund said in November that it supported India’s efforts to fight corruption through currency control measures.
Georgieva compared the move to that of the European Union, which is also phasing out high denomination bills but over a longer period of time.
“While demonetisation has, in the short term, created some impact on businesses dependent on cash, in the long term the impact will be positive… The reforms India is targeting are profound,” she said.
She also said the government’s financial inclusion programme along with the move towards digital payments and direct transfer of subsidies will help the poor.
Georgieva, who was in India for two days, travelled on a local train in Mumbai and visited the world’s biggest slum in Dharavi. She said she found that people were eager to get a better life and were willing to pay more for improved services. Georgieva also appreciated the competition among states to improve ease of doing business. “India is the bright spot in today’s global economy and it is visible in the country’s performance and more so in the aspirations of the people here,” she said.
“Our growth projection for India for this year is 7%. The signs are positive with the reform process underway and GST (goods and services tax) expected to be implemented soon.”
The commerce and industry ministry is considering relaxing FDI norms in certain sectors including retail to further boost inflows.
Foreign investments in the services sector increased 77.6% to $7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business.
The sector, which includes banking, insurance, research and development (R&D), outsourcing, courier and technology testing, had received foreign direct investment (FDI) worth $4.25 billion during the April-December period of last fiscal, 2015-16, according to the Department of Industrial Policy and Promotion (DIPP).
The sector contributes over 60% to India’s gross domestic product (GDP) and accounts for 17% of the total foreign investment inflows.
The other sectors where inflows have recorded growth during the nine-month period of 2016-17 are telecom ($5.54 billion), trading ($2 billion), computer software and hardware ($1.81 billion) and automobile ($1.45 billion).
In step FDI growth in important sectors like services, overall foreign inflows in the country increased 22% to $35.84 billion during April-December 2016-17.
The commerce and industry ministry is also considering relaxing FDI norms in certain sectors including retail to further boost inflows. Foreign investment is considered crucial for India, which needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth.
A strong inflow of foreign investments will help improve the country’s balance of payments situation and strengthen the rupee against other global currencies, especially the US dollar.
The Organisation of Economic Cooperation and Development (OECD) has supported India’s demonetisation drive, asserting that immediate impact of the move on Indian economy will be transient.
The Organisation of Economic Cooperation and Development (OECD) has supported India’s demonetisation drive, asserting that immediate impact of the move on Indian economy will be transient.
“Implementing the demonetisation has had transitory and short- term costs but should have long-term benefits,” OECD said on Tuesday in its report, Economic Survey of India. OECD Secretary-General Angel Gurria said the impact of demonetisation on consumption pattern may just have been limited to the quarter ended December 31, 2016.
The Paris-based global policy forum projected a GDP growth rate of 7 percent in the current financial year, while estimating it to grow to 7.3 percent in FY18 and 7.7 percent in FY19.
The OECD comments come a few hours before the Central Statistics Office (CSO) releases Gross Domestic Product (GDP) growth estimates for Q3FY17 and the second full year advance estimates for 2016-17. The GDP estimates released in January projected that India would grow 7.1 percent in 2016-17 from 7.9 percent in the previous year.
Amid signs of slide in consumer goods sales and muted investment activity because of the cash crunch, it is highly likely that the CSO will sharply revise downwards India’s GDP growth in its second advance estimates. Economic Affairs Secretary Shaktikanta Das, who was also present at the launch of the report, said that the benefits and outcomes of demonetisation would be positive from next quarter. “The process of remonetisation is nearly complete. Any adverse impact of consumption in that quarter is not likely to spill over next year. So that is over and behind us,” Das said.
“The shift towards a less cash economy and formalisation should, however, improve the financing of the economy and availability of loans (as a result of the shift from cash to bank deposits) and should promote tax compliance,” the report said.
On November 8, Prime Minister Narendra Modi announced that existing 500 and 1000 rupee notes would cease to be legal tender, thereby sucking out 86 percent of the currency in circulation from the economy. The survey, however, said that the temporary cash shortage and wealth destruction, as fake currency and illegal cash will not be redeemed. T
he report further said that the implementation of the goods and services tax (GST) reform will contribute to making India more integrated market. “By reducing tax cascading, it will boost competitiveness, investment and job creation.
The GST reform — designed to be initially revenue-central — should be complemented by a reform of income and property taxes,” the OECD survey said.
The survey pointed out that investment is still held back by relatively high corporate income tax rates, slow land acquisition process, weak corporate balance sheets and high non-performing loans which weigh on banks’ lending and infrastructure bottlenecks.
Key recommendations of OECD included raising revenue, especially from property and personal income taxes, ensuring that government debt to GDP ratio returns to a declining path, as well as strengthening of public bank balance sheets by recapitalising them and promoting bank consolidation.
It also suggested simpler and flexible labour laws and a gradual reduction in corporate income tax from 30% to 25%, while broadening the tax base.
Official data released on Tuesday showed that demonetisation hasn’t pushed the economy into a retreat as most feared, with its short-term adverse impact. (Source: Reuters)
Official data released on Tuesday showed that demonetisation hasn’t pushed the economy into a retreat as most feared, with its short-term adverse impact to a large extent restricted to construction and financial services. Real GDP growth in the December quarter, in the midst of which the note ban came into effect, came in at a respectable 7% (though lower than 7.4% in the previous quarter) and the gross value added (GVA) was 6.6%, with the difference explained by robust indirect taxes and reining in of subsidies.
Upward revision of GVA estimates for 2015-16 led to downward corrections in GVA for Q1 and Q2 of the current fiscal but despite this, there were marginal upward revisions in the rates of GDP expansion in these quarters, thanks to a surge in indirect taxes.
Solid performance by the “agriculture and allied sectors”, pump-priming by the government on the consumption side, better-than-expected performance by mining and manufacturing sectors and a seasonal — though larger-than-usual — pick-up in private consumption masked whatever negative effect the note swap exercise had on the economy, going by the Central Statistics Office’s data.
However, as the GDP was slowing even before demonetisation and the note swap has indeed had an incremental adverse effect on it, both GDP and GVA growth for 2016-17 have been projected to be much lower than in the previous year. In the second advance estimate, the CSO has kept the GDP growth estimate for the current financial year at 7.1%, the same as in the first advance estimate released in early January, and GVA growth at 6.7%. But given that 2015-16 GDP growth, which was seen at 7.6% at the time of the first advance estimate, was subsequently revised to 7.9%, the CSO’s latest take on 2016-17 growth is virtually more sanguine than its previous estimate.
While the CSO’s GDP estimate for 2016-17 is evidently higher than that of most others, many analysts said the growth assumed by it for the second half (6.8%) was optimistic. “Given the fact that the fall from H1 to Q3 is not much, I don’t think that we should then necessarily assume that the rebound in Q4 is going to be very sharp,” said Aditi Nayar, economist at Icra. Stating that the GDP number is better than expected, Saugata Bhattacharya, chief economist at Axis Bank, said, “Since growth slowdown (due to demonetisation) has been shallower than expected, and in line with the RBI’s projections, the probability of rate cuts going ahead has come down.”
The minutes of the monetary policy committee’s meeting released last week indicated that it changed its stance from “accommodative” to “neutral” because the growth drag from demonetisation is expected to fade soon. India Ratings reiterated its view that “much of the impact of demonetisation will be visible in Q4FY17 leading to an overall GDP growth of 6.8% in 2016-17”.
Economic affairs secretary Shaktikanta Das said: “This year’s GDP (growth) is around 7%, based on available numbers. Nothing can be deciphered on anecdotal evidence. Demonetisation only impacted consumption in some cities, since most purchases happened on credit or debit cards. The so-called negative impact, if relevant, was only temporary.”
The 7% GDP growth forecast for the third quarter helped India maintain the coveted tag of the world’s fastest-growing major economy despite demonetisation, better than China’s 6.8% in the December quarter.
While analysts pointed out the lack of congruity between the CSO’s estimate and other high-frequency data and corporate results, chief statistician TCA Anant said all available data have been made use of in the second advance estimate, including corporate performance up to the December quarter, sales of commercial vehicles, railway freight, etc, for the first “9/10 months of the financial year”.
According to the CSO, with production growth of foodgrains during 2016-17 kharif and rabi seasons being 9.9% and 6.3%, respectively, the farm sector grew a robust 6% in Q3 from 3.8% in the previous quarter and compared with a 2.2% contraction in the year-ago quarter. Despite the anecdotes of industrial clusters hit by the note ban during the period, manufacturing grew a healthy 8.3% in Q3 on a robust base of 12.8% in the year-ago quarter and compared with 6.9% in Q2 this fiscal. Mining also posted a smart recovery from a fall of 1.3% in Q2 to a robust expansion of 7.5% in Q3. The bad performers on the output side was “financial services, etc”, which posted a modest 3.1% growth in Q3 compared with 7.6% in the previous month, and construction which grew just 2.7% in the December quarter.
Government final consumption expenditure (GFCE) posted a 19.9% growth in Q3 against 15.2% in the previous quarter, the CSO said. Given that 17% growth in GFCE is estimated for the whole of 2016-17, it needs to grow at 17.4% in Q4. Considering that the Centre, as is seen from the April-January fiscal data separately released by the Controller General of Accounts, has slowed down spending in the later months of the year, the spending boost must come from PSUs.
Although both Dussehra and Diwali fell in the December quarter, the 10.1% growth reported by CSO in the private consumption expenditure looked puzzling to most analysts (but some said use of old notes for consumption might have contributed to the rise). So was the 3.5% growth in gross fixed capital formation, which was declining for the previous three quarters.
Given that nominal GDP growth has been projected at 11.5% for 2016-17, compared with 10% in the last fiscal, it may offer more leeway to the government to improve spending in the next fiscal and yet contain fiscal deficit, which is expressed as a ratio of the nominal GDP, at the targeted 3.2%.
Discrepancies — the difference between the supply and demand side of GDP — turned negative after a gap of four quarters (-Rs 6,767 crore) in the December quarter, compared with Rs 45,378 crore in the second quarter and Rs 30,645 crore in the first quarter. In the last quarter of 2015-16, discrepancies touched a massive Rs 1,43,210 crore, causing a flutter then and raising doubts about the credibility of the country’s data collection mechanism. When private final consumption expenditure, gross fixed capital formation, government final consumption expenditure, change in stocks, valuables, and net exports exceed the overall GDP (based on the supply side data), discrepancies turn negative.
Analysts expect the exports sector to contribute more to GDP growth in the coming quarters, despite the demonetisation blues, thanks primarily to a favourable base. In real terms, the export growth for 2016-17 has been projected at 2.3%, compared with -5.4% in the last fiscal. Despite demonetisation, merchandise exports rose 2.3% in November, 5.7% in December and 4.3% in January.
A new provision for secondary adjustment in transfer pricing, announced in the Union Budget for 2017-18, is likely to affect the cash flow of multinational corporations (MNCs) and the dividend distribution tax paid by their Indian subsidiaries. The provision has also sparked worry on Minimum Alternate Tax (MAT) and service tax payable by the subsidiaries, as well as retrospective implementation from 2013-14. Experts claim the provision is in line with the norms of the Organisation for Economic Co-operation and Development (OECD) —but its wording is giving rise to apprehension.
Transfer pricing is the value at which companies trade products, services or assets between units across borders, a regular part of doing business for a multinational.
A primary adjustment is made, by tax administration, to company´s taxable profits on transactions with an associated enterprise in a secondary jurisdiction.
At present, there is only primary adjustment on transfer pricing of an MNC´s subsidiary.
This means if the subsidiary concerned agrees to the tax adjustment provided by an assessment officer, or on its own makes such an adjustment, it will pay taxes on that amount.
For instance, a company claims it has earned Rs.400 crore, and the transfer pricing officer claims it has earned Rs.600 crore, using the arm´s length principle.
If the company agrees to the assessment and pays tax on this, it is called primary adjustment.
Under the existing law, the additional Rs.200 crore would not need to be shown in the books of the company.
A secondary adjustment arises when simultaneous changes are made in the books of accounts of the company as well. This is what new provision aims at —the additional Rs.200 crore would also have to be shown in the books of the Indian subsidiary of MNC concerned.
“The parent company might not want to part with this Rs.200 crore, as the subsidiary in India might not be significant for its strategy,” said Eric Mehta, partner, transfer pricing, PwC India.
“An MNC might have a global presence, with India only a small part of its affairs.” Sending the money to India would also face hurdles because of lack of a contractual arrangement, said Amit Maheshwari, partner, Ashok Maheshwary and Associates.
He added it would have an adverse effect on the cash flow and business operations of MNCs.
If the Indian subsidiary concerned does not get the required amount, say Rs.200 crore, within a stipulated period, it would be considered a loan to the parent or associate, attracting interest.
(The time period has not been specified in the Budget documents.) “In case, the total amount is brought to the books of the Indian company, it will give rise to higher dividend, which in turn, will give rise to higher dividend distribution tax,” said Mehta.
Also, if the payment is towards services rendered by Indian subsidiaries, the higher receipt in books will give rise to higher service tax liability, added Mehta.
Maheshwari said higher receipt and hence profit in the books would also give rise to MAT as profit on the additional income, in this case Rs.200 crore, was not shown earlier in the books earlier.
It should be noted that MAT is applicable to book profits.
All this will, however, only apply if the primary adjustment of the Indian entity exceeds Rs.1 crore the previous year —along with other conditions.
The provision has also given rise to fear of retrospective application, as the condition of primary adjustment exceeding Rs.1 crore is effective from April 1, 2016 or previous years.
Currently, the assessment of 2013-14 is underway for transfer pricing purposes, said Mehta, pointing to the possibility of secondary adjustments made from that year.
He agreed the purpose of the provision might not be to have retrospective effect, but the wording does not prevent it.
India’s economic growth would slow to about six per cent in the second half of this financial year (October-March) due to demonetisation, against 7.2 per cent in the first half, the International Monetary Fund (IMF) said on Wednesday.
India’s representative in IMF Subir Gokarn said the growth projections came at a time when hard data was unavailable. He described the assessment as “unduly pessimistic”. In the medium term, however, the IMF is hopeful that implementation of the Goods and Services Tax could raise India’s growth rate to more than eight per cent.
The Fund said the cost of recapitalising public sector banks would be affordable even under a negative scenario. In a report on India, the IMF said growth would gradually rebound in 2017-18.
In January, it had cut India’s growth estimate to 6.6 per cent for 2016-17 due to the note ban, against 7.6 per cent estimated earlier. Growth was estimated to be 6.2 per cent in the fourth quarter of the financial year.
Taking both the estimates into consideration, the IMF said, third quarter growth might fall below six per cent.
The Central Statistics Office will come out with the third quarter gross domestic product (GDP) data and the revised advance estimates on the coming Tuesday. Its first advance estimates had shown economic growth at 7.1 per cent in 2016-17, against 7.6 per cent the previous year. The office had not taken into account the effect of demonetisation.
Commenting on IMF’s revision of growth rates, Gokarn said, “While we do not question the methodologies used to revise the estimates, the fact is that there isn’t very much hard data to base the revisions.” He said different assumptions about the impact would obviously lead to different conclusions. While virtually all forecasters have revised their projections for 2016-17 downwards, the range was relatively wide, he added.
To buttress his points, Gokarn said the World Bank and the Asian Development Bank have pegged growth at seven per cent, after accounting for change in the currency policy. The authorities’ estimate was 7.1 per cent. IMF directors supported India’s efforts to tackle illicit financial flows, but noted the strains that have emerged from the currency exchange initiative. They called for action to quickly restore the availability of cash to avoid further payment disruptions, and encouraged prudent monitoring of the potential side-effects of the initiative on financial stability and growth. On tackling India’s $130 billion in stressed loans, the IMF said “recapitalisation costs should be manageable” at between 1.5 and 2.4 per cent of the GDP forecast, according to Reuters.
Of that, the government’s share would be between 1.0 and 1.6 per cent of GDP over the four years to March 2019, assuming 40 per cent of the loans have to be provided against. “It’s very positive that both the Reserve Bank of India (RBI) and the government are putting a shared focus on addressing the balance-sheet problem,” IMF Resident Representative Andreas Bauer told a conference call.
The chief economic advisor, Arvind Subramanian, on Wednesday backed a call by the RBI to set up an institution similar to “bad bank”, saying urgency was needed to address troubled loans weighing on the banking sector.
In a special report on corporate and banking sector risks in India, the IMF said recapitalisation costs would be “significantly higher if there is a policy shift to more conservative provisioning requirements”.
In case of a rise in the provisioning ratio to 70 per cent, cumulative recapitalisation needs would increase to 3.3-4.2 per cent of forecast GDP in the financial year to March 2019, with a government share of 2.2-2.8 per cent, the IMF said.
The IMF said with temporary demand disruptions and increased monsoon-driven food supplies, inflation was expected at about 4.75 per cent by early 2017— in line with the Reserve Bank of India’s inflation target of 5 per cent by March 2017.
The Fund said domestic risks flow from a potential further deterioration of corporate and public bank balance sheets, as well as setbacks in the reform process, including in GST design and implementation, which could weigh on domestic demand-driven growth and undermine investor and consumer sentiment.
On the upside, IMF said larger than expected gains from GST and further structural reforms could lead to significantly stronger growth; while a sustained period of continued-low global energy prices would also be very beneficial to India.
For subscribers, who are yet to seed Aadhaar and Bank details with their UAN, new Composite Claim Form (Non-Aadhaar) replaces the existing Forms No. 19, 10C & 31
With a view to make its services available to its stakeholders in an efficient and transparent manner, EPFO had introduced Universal Account Number (UAN). Subscribers, who seed Aadhaar and Bank account details, to their UAN have the facility to submit claim forms directly to EPFO without the attestation of employers by preferring claims in Forms No. 19 (UAN), 10C (UAN) & 31(UAN).
To add further convenience, these forms now have been further simplified and replaced with a single page Composite Claim Form (Aadhaar). This new Composite Claim Form (Aadhaar), can be submitted without the attestation of employers.
For subscribers also, who are yet to seed Aadhaar and Bank details with their UAN, new Composite Claim Form (Non-Aadhaar) replaces the existing Forms No. 19, 10C & 31. The new Single page Composite Claim Form (Non-Aadhaar), can be submitted with the attestation of employers.
Instruction sheet for filing the Composite Claim Form (Aadhaar):
1. The Composite Claim Form (Aadhaar) is applicable in cases where a member’s complete details in Form-11 (New), Aadhaar number and bank account details are available on the UAN Portal and UAN has been activated. Such members can submit this form directly to the concerned FPFO office, without attestation of claim form by the employees.
2. Purpose of advance and documents requited: (The purpose may be on of the following):
i) Housing Loan/ Purchase of site/ house/ flat or for construction/ Addition alteration in existing house/ Repayment of housing loan: No document is required. New Declaration Form/ Utilization Certificate required earlier has been discontinued.
ii) Illness of member/ family: i) Certificate of doctor and ii) Certificate by employer that ESIC facility is not available to the member may be submitted by the member.
iii) Marriage of self/ son/ daughter/ brother/ sister: No document/ Marriage card is required.
iv) Post Matriculation education of children: No document is required.
v) Lockout or closure of factory/ Cut in supply of electricity: No document is required.
vi) Natural calamity: No document is required.
vii) Purchasing equipment by physically handicapped: Medical certificate is required.
viii) One year before retirement: 90% of total PF balance can be withdrawn. No document is required.
ix) Investment in Varistha Pension Bima Yojana: 90% of total PF balance can be transferred to LIC. No document is required.
3. No revenue stamp (Rs 1) is required to be affixed by the member.
4. Income Tax (TDS) is deducted if the service is less than 5 years (60 months). No TDS is deducted in case the total balance is less than Rs 50,000. However, TDS is deducted @10% if the member submits PAN in such cases. In case PAN is not submitted, then TDS @34.608% is deducted.
5. The total service in the present establishment as well as previous establishment is counted and, therefore, it is advisable to merge all PF accounts.
6. Pension withdrawal benefit can be availed only if the service is less than 10 years.
Instruction sheet for filing the Composite Claim Form (Non-Aadhaar)
1. Purpose of advance and documents requited: (The purpose may be on of the following):
i) Housing Loan/ Purchase of site/ house/ flat or for construction/ Addition alteration in existing house/ Repayment of housing loan: No document is required. New Declaration Form/ Utilization Certificate required earlier has been discontinued.
ii) Illness of member/ family: i) Certificate of doctor and ii) Certificate by employer that ESIC facility is not available to the member may be submitted by the member.
iii) Marriage of self/ son/ daughter/ brother/ sister: No document/ Marriage card is required.
iv) Post Matriculation education of children: No document is required.
v) Lockout or closure of factory/ Cut in supply of electricity: No document is required.
vi) Natural calamity: No document is required.
vii) Purchasing equipment by physically handicapped: Medical certificate is required.
viii) One year before retirement: 90% of total PF balance can be withdrawn. No document is required.
ix) Investment in Varistha Pension Bima Yojana: 90% of total PF balance can be transferred to LIC. No document is required.
For subscribers, who are yet to seed Aadhaar and Bank details with their UAN, new Composite Claim Form (Non-Aadhaar) replaces the existing Forms No. 19, 10C & 31. The new Single page Composite Claim Form (Non-Aadhaar), can be submitted with the attestation of employers.
Instruction sheet for filing the Composite Claim Form (Aadhaar):
1. The Composite Claim Form (Aadhaar) is applicable in cases where a member’s complete details in Form-11 (New), Aadhaar number and bank account details are available on the UAN Portal and UAN has been activated. Such members can submit this form directly to the concerned FPFO office, without attestation of claim form by the employees.
2. Purpose of advance and documents requited: (The purpose may be on of the following):
i) Housing Loan/ Purchase of site/ house/ flat or for construction/ Addition alteration in existing house/ Repayment of housing loan: No document is required. New Declaration Form/ Utilization Certificate required earlier has been discontinued.
ii) Illness of member/ family: i) Certificate of doctor and ii) Certificate by employer that ESIC facility is not available to the member may be submitted by the member.
iii) Marriage of self/ son/ daughter/ brother/ sister: No document/ Marriage card is required.
iv) Post Matriculation education of children: No document is required.
v) Lockout or closure of factory/ Cut in supply of electricity: No document is required.
vi) Natural calamity: No document is required.
vii) Purchasing equipment by physically handicapped: Medical certificate is required.
viii) One year before retirement: 90% of total PF balance can be withdrawn. No document is required.
ix) Investment in Varistha Pension Bima Yojana: 90% of total PF balance can be transferred to LIC. No document is required.
3. No revenue stamp (Rs 1) is required to be affixed by the member.
4. Income Tax (TDS) is deducted if the service is less than 5 years (60 months). No TDS is deducted in case the total balance is less than Rs 50,000. However, TDS is deducted @10% if the member submits PAN in such cases. In case PAN is not submitted, then TDS @34.608% is deducted.
5. The total service in the present establishment as well as previous establishment is counted and, therefore, it is advisable to merge all PF accounts.
6. Pension withdrawal benefit can be availed only if the service is less than 10 years.
Instruction sheet for filing the Composite Claim Form (Non-Aadhaar)
1. Purpose of advance and documents requited: (The purpose may be on of the following):
i) Housing Loan/ Purchase of site/ house/ flat or for construction/ Addition alteration in existing house/ Repayment of housing loan: No document is required. New Declaration Form/ Utilization Certificate required earlier has been discontinued.
ii) Illness of member/ family: i) Certificate of doctor and ii) Certificate by employer that ESIC facility is not available to the member may be submitted by the member.
iii) Marriage of self/ son/ daughter/ brother/ sister: No document/ Marriage card is required.
iv) Post Matriculation education of children: No document is required.
v) Lockout or closure of factory/ Cut in supply of electricity: No document is required.
vi) Natural calamity: No document is required.
vii) Purchasing equipment by physically handicapped: Medical certificate is required.
viii) One year before retirement: 90% of total PF balance can be withdrawn. No document is required.
ix) Investment in Varistha Pension Bima Yojana: 90% of total PF balance can be transferred to LIC. No document is required.
2. No revenue stamp (Rs 1) is required to be affixed by the member.
3. Income Tax (TDS) is deducted if the service is less than 5 years (60 months). No TDS is deducted in case the total balance is less than Rs 50,000. However, TDS is deducted @10% if the member submits PAN in such cases. In case PAN is not submitted, then TDS @34.608% is deducted.
4. The total service in the present establishment as well as previous establishment is counted and, therefore, it is advisable to merge all PF accounts.
5. Pension withdrawal benefit can be availed only if the service is less than 10 years.
