PF Withdrawal: Major change in PF withdrawal rules! EPFO declares this form invalid for TDS exemption..
Change in EPF Withdrawal Rules: A major update has been released by the Employees' Provident Fund Organisation (EPFO). Issuing a significant clarification, the EPFO stated that starting from the 2026-27 tax year, Forms 15G and 15H will no longer be valid for claiming TDS exemption on EPF withdrawals. PF subscribers will now be required to submit Form 121 to claim TDS exemption under the Income-Tax Act, 2025.
In a post on the social media platform X, the EPFO stated, "Forms 15G or 15H are no longer valid for claiming EPF TDS exemption. From the 2026-27 tax year, TDS exemption can only be claimed by submitting Form 121 in accordance with the Income-Tax Act, 2025."
What were the previous provisions?
According to Aditya Bhattacharya, Partner at King Stubb & Kasiva Advocates & Attorneys, resident taxpayers previously had to choose between Form 15G and Form 15H based on their age and eligibility:
Form 15G: Intended for individuals under the age of 60 whose estimated total income fell below the taxable limit.
Form 15H: Intended for senior citizens aged 60 years or older.
The major change for EPF members is that both these forms have been rendered invalid for TDS exemption starting from the 2026-27 tax year. Consequently, if a member submits Form 15G or 15H for an EPF withdrawal, TDS deduction cannot be avoided.
What has changed and what hasn't?
The shift from Forms 15G and 15H to a single Form 121 is merely a procedural simplification, not the introduction of a new tax. The Income Tax Act, 2025, effective from April 1, 2026, allows eligible resident taxpayers to submit a consolidated declaration under Section 393(6) if they anticipate that their total tax liability for the year will be nil.
Explaining this in detail, Aditya Bhattacharya said, "It is essential to clearly understand the purpose of Form 121. It does not automatically make your withdrawal tax-free. It merely allows an eligible individual—whose estimated total income for the year attracts no tax—to request that Tax Deducted at Source (TDS) not be deducted.
This is entirely optional and is not available to non-residents or individuals who actually have a tax liability. Furthermore, under EPFO guidelines, possessing a valid PAN card is mandatory; a declaration submitted without a PAN will be considered invalid. Therefore, members should verify their eligibility before submitting it."
EPFO's New Online System and Unique Number
The EPFO has instructed all its regional offices to issue a unique identification number for every Form 121 received and to facilitate online submission and e-signing.
Tax experts believe that these measures will make TDS reporting more transparent, accurate, and traceable. They advise members planning to withdraw money from their PF accounts to use the new Form 121 from the outset, rather than waiting for deductions to occur and subsequently claiming a refund.
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