When it comes to withdrawing funds from your Provident Fund (PF) account in India, understanding tax implications is essential. The Employees’ Provident Fund (EPF) is a popular long-term savings scheme, but if funds are withdrawn before completing five years of continuous service, the amount may become taxable. In such cases, submitting Form 15G can help avoid Tax Deducted at Source (TDS) on premature withdrawals, provided specific conditions are met. Knowing how and when to use Form 15G for PF withdrawal can ensure that your hard-earned savings are not unnecessarily reduced by taxes.
What is Form 15G?
Purpose of Form 15G
Form 15G is a self-declaration form under Section 197A of the Income Tax Act, 1961. It allows individuals to declare that their total income is below the taxable limit, and hence, no TDS should be deducted on their income. This form is especially useful for non-senior citizens who earn interest or receive income that is otherwise subject to TDS.
Eligibility for Form 15G Submission
- You must be an individual or a Hindu Undivided Family (HUF).
- You must be a resident Indian for the applicable financial year.
- Your age should be below 60 years (Form 15H is used for senior citizens).
- Your total income, including the PF withdrawal amount, must be below the basic exemption limit for that financial year.
- You must not have any tax liability for the year.
PF Withdrawal and Tax Implications
When is PF Withdrawal Taxable?
PF withdrawals are subject to taxation if the employee withdraws the fund before completing five years of continuous service. In such cases, TDS is applicable if the total withdrawal amount exceeds â¹50,000. The tax deducted is typically 10% if PAN is submitted, and 34.608% if PAN is not submitted. However, by submitting Form 15G, eligible individuals can request exemption from this TDS deduction.
When TDS is Not Applicable
- If the PF account is withdrawn after five years of continuous service.
- If the total withdrawal amount is less than â¹50,000.
- If the withdrawal is due to reasons like ill health, discontinuation of business, or the employer’s decision to close the organization.
- If Form 15G is submitted and the individual meets the eligibility criteria.
How to Fill Form 15G for PF Withdrawal
Step-by-Step Instructions
Filling out Form 15G accurately is crucial to avoid any issues or delays in your PF withdrawal process. The form comprises two parts: Part 1 is to be filled by the individual, while Part 2 is to be completed by the EPFO office.
Details Required in Part 1:
- Name of the Assessee (as per PAN)
- Permanent Account Number (PAN) Mandatory
- Status (Individual/HUF)
- Residential Status
- Previous Year (e.g., FY 202425)
- Address and contact information
- Estimated total income for the financial year
- Details of other incomes, if any
- Declaration of no tax liability
- Signature of the individual
Submission Methods
You can submit Form 15G for PF withdrawal both online and offline:
- Offline: Submit the filled and signed Form 15G at the nearest EPFO office along with your withdrawal form and PAN copy.
- Online: Through the EPFO member portal, you can fill Form 15G digitally while initiating an online withdrawal request.
Online PF Withdrawal Using Form 15G
Steps to Submit Online
To submit Form 15G while applying for PF withdrawal online through the EPFO portal, follow these steps:
- Log in to the EPFO Member e-SEWA portal using your UAN and password.
- Ensure your KYC details (PAN, Aadhaar, and bank details) are verified.
- Navigate to Online Services’ > Claim (Form-31, 19 & 10C)’.
- Select the relevant claim and enter the required details.
- Upload Form 15G and a copy of your PAN.
- Submit the claim.
Processing Time
Once submitted, your claim is typically processed within 710 working days, provided all documentation is in order. The amount is then credited directly to your registered bank account.
Common Mistakes to Avoid
Errors While Filling Form 15G
Incorrect information can lead to rejection of the TDS exemption request. Common errors include:
- Leaving fields blank
- Mismatched PAN details
- Incorrect estimate of total income
- Failure to sign the form
Not Meeting Eligibility Criteria
Submitting Form 15G despite having a taxable income can result in penalties and legal complications. Always assess your total income for the financial year before submitting the declaration.
Why Form 15G is Important for PF Withdrawal
Maximizing Take-Home Amount
By avoiding unnecessary TDS deductions, individuals receive the full amount of their PF savings, which can be critical during times of financial need or career transition.
Simplified Tax Process
Form 15G helps in reducing the complexity of claiming TDS refunds through the income tax return process, saving time and effort for individuals with no taxable income.
Documentation Checklist for PF Withdrawal
- Duly filled Form 15G (Part 1)
- Copy of PAN card
- Cancelled cheque of your bank account
- Form 19/10C/31 as applicable for PF withdrawal
- Aadhaar and bank details linked and verified with UAN
Form 15G is a helpful financial tool for individuals withdrawing their Provident Fund before five years of service and whose total income is below the taxable limit. By submitting this declaration correctly, eligible employees can ensure that no TDS is deducted from their PF amount, maximizing their savings and avoiding lengthy tax refund procedures. Understanding the eligibility requirements, accurately filling the form, and submitting it either online or offline with supporting documents can make the PF withdrawal process smoother and more efficient. Staying informed about tax-saving options like Form 15G is a smart step for anyone managing their personal finances and planning their financial future effectively.