BUSINESS
PF Withdrawal Alert: PF withdrawal rules have changed! Forms 15G and 15H are discontinued; which form do you need to fill out now?
All employees save a portion of their salary for the future. If they ever have to make a big expense or get married, this PF deposit comes in very handy. Until now, employees could fill out Form 15G or Form 15H to avoid TDS deductions when withdrawing money from their PF account. However, according to the new tax rules, this form will now have to be replaced by Form 121. It has been stated that this change will be effective from the financial year 2026-27. Therefore, it is important for employees who are considering withdrawing money from PF to know about this new rule.
What has changed in Form 15G and Form 15H?
Previously, eligible employees could file Form 15G to avoid TDS when withdrawing PF. However, senior citizens used Form 15H. Now, according to new rules, Form 121 replaces both forms. However, filing this form does not automatically result in TDS being deducted. For this, the employee must meet the necessary conditions.
What is Form 121?
Form 121 is a form used to indicate that income tax is not payable on your estimated annual income. Eligible employees can use this form to request that TDS be waived when withdrawing funds from their PF account, as required by the regulations.
Who is eligible to file Form 121?
There are certain requirements for filing Form 121.
1. The concerned employee must be a taxpayer resident in India.
2. His estimated total income should satisfy the criteria of not being liable to income tax.
3. The employee must have a PAN card.
4. Non-Resident Indians (NRIs) cannot avail of this form. The employee can only use the form if they meet these conditions.
Can Form 121 be filled online?
It has been reported that a system is being developed to make the process of filing Form 121 online. Once this feature is launched, it may become easier for employees to fill out the form. Additionally, a provision is expected to be made to assign a unique identification number to each form.
What should employees keep in mind?
Before withdrawing money from PF, check the new form, TDS rules, and your eligibility. Simply filing Form 121 does not automatically exempt you from TDS. Therefore, it's important to check the official instructions from the EPFO and the Income Tax Department before applying.
