PF account holders need to pay attention to a key tax rule update.
The Employees’ Provident Fund Organisation (EPFO) has changed the process for Tax Deducted at Source (TDS) relief during PF withdrawals.
Old forms used for this purpose—Form 15G and Form 15H—are no longer valid.
They have now been replaced with a new Form 121, effective from April 1.
This change is meant to simplify the system, but it also introduces new conditions that taxpayers must understand carefully.
What Has Changed in PF Tax Rules?
Earlier, individuals below 60 years of age used Form 15G, while senior citizens used Form 15H to avoid TDS deductions on PF withdrawals.
Now, both of these forms have been replaced by a single document—Form 121.
According to EPFO’s latest circular issued on April 13, Form 121 will only be accepted from individuals whose estimated annual tax liability is zero.
In simple terms, this means the person’s total yearly income must fall below the taxable limit.
However, this benefit is not available to everyone.
Companies, firms, and Non-Resident Indians (NRIs) are not allowed to submit this form.
Who Can Use Form 121?
EPFO has clarified that Form 121 is not mandatory for all PF account holders.
It is only required for those who want to avoid TDS deduction at the time of withdrawal.
If your income is below the tax exemption limit and you do not owe any tax for the financial year, you can submit this form to claim PF withdrawals without TDS.
Even if someone accidentally submits the old forms after April 1, EPFO has said they will not be rejected immediately.
The system will still proceed with collecting the new Form 121 from the employee.
Understanding EPF in Simple Terms
The Employees’ Provident Fund (EPF) is a government-backed savings scheme for salaried employees in the private sector.
Under this system, employees contribute 12% of their basic salary every month, and employers contribute an equal amount.
From the employer’s share, 8.33% goes into the Employees’ Pension Scheme (EPS), while the remaining amount goes into the PF account.
The deposited money earns interest over time, making EPF a long-term savings tool for retirement security.