The rules for Provident Fund (PF) withdrawals have recently changed, and this update is important for employees planning to manage their PF savings.
The Employees’ Provident Fund Organisation (EPFO) has introduced a new system for Tax Deducted at Source (TDS) declarations, replacing the old forms used for tax exemption claims.
Old PF Tax Forms Replaced by New Rule
Earlier, PF account holders used Form 15G and Form 15H to avoid TDS on withdrawals. Individuals below 60 years used Form 15G, while senior citizens used Form 15H.
Now, the EPFO has replaced both forms with a single new form called Form 121.
This change came into effect from April 1.
The purpose of this new form is to simplify the process and ensure proper tax compliance during PF withdrawals.
Who Can Use Form 121?
The new Form 121 is not meant for everyone.
It can only be used by individuals whose estimated total tax liability for the financial year is zero.
This means that if your income falls below the taxable limit, you may use this form to avoid TDS deductions on your PF withdrawal.
However, companies, firms, and Non-Resident Indians (NRIs) are not allowed to submit this form.
The EPFO has also clarified that filings made after April 1 using the old forms will not be rejected immediately, but employees will eventually need to switch to Form 121.
What PF Account Holders Should Know
The Employees’ Provident Fund (EPF) is a government-backed savings scheme mainly for private-sector employees.
Under this system, employees contribute 12% of their basic salary every month, and the employer contributes an equal amount.
A portion of the employer’s contribution also goes into the Employees’ Pension Scheme (EPS).
The PF account earns interest over time, making it an important long-term savings tool for retirement and financial security.
With the new Form 121 rule, PF withdrawals will now follow a more updated tax declaration process, especially for those looking to avoid TDS.
