EPFO PF Withdrawal Rules have changed from tax year 2026-27, and employees planning to withdraw their provident fund savings need to know about the new declaration process.
The Employees’ Provident Fund Organisation (EPFO) has clarified that Forms 15G and 15H will no longer be accepted for claiming tax deducted at source (TDS) exemption on eligible PF withdrawals. Form 121 will replace both forms under the new income-tax framework.
The change is linked to the Income-tax Act, 2025, and the Income-tax Rules, 2026. EPFO shared the clarification through a post on social media platform X, asking eligible members to use the new form for claiming TDS exemption from the 2026-27 tax year.
EPFO PF Withdrawal Rules: What Has Changed?
Previously, eligible resident taxpayers used Form 15G or Form 15H to declare that their estimated income met the conditions for avoiding TDS.
Form 15G was generally used by eligible individuals below 60 years of age, while Form 15H was intended for eligible senior citizens aged 60 and above.
From tax year 2026-27, Form 121 replaces these two declarations. Eligible taxpayers across both age groups can use the consolidated form, provided they satisfy the prescribed conditions.
The change simplifies the declaration process by bringing the two earlier forms into a single format.
It does not introduce a new tax on PF withdrawals, nor does it mean that every employee must submit Form 121 whenever they withdraw money.
Who Should Use Form 121 for PF Withdrawal?
Form 121 is intended for eligible taxpayers whose estimated tax liability for the relevant tax year is nil and who want to avoid TDS on specified payments.
For EPF members, this can be relevant when a withdrawal would otherwise attract tax deduction at source.
Employees considering an early PF withdrawal should first check their continuous service period, the amount they plan to withdraw and their estimated total income.
These factors can affect whether TDS applies and whether they qualify to submit the declaration.
The form is not available to everyone. Under the prescribed rules, non-residents are not eligible to submit Form 121, and individuals who expect to have a tax liability cannot use it simply to avoid a deduction.
A valid PAN and compliance with the applicable eligibility conditions are also important. Members should verify their details and the latest EPFO instructions before submitting any declaration.
Does Form 121 Make Your PF Withdrawal Tax-Free?
No. Submitting Form 121 does not automatically make a provident fund withdrawal tax-free.
The form is a declaration used to seek non-deduction of TDS when the taxpayer meets the prescribed conditions; the final tax treatment depends on the applicable rules and individual circumstances.
For example, an employee withdrawing EPF savings before completing five years of continuous service may face TDS if the relevant conditions are met.
Whether tax is deductible depends on the applicable provisions, the withdrawal amount and other relevant factors.
TDS is the tax deducted at the time a payment is made. It is different from the final income-tax liability calculated under the applicable law.
Therefore, avoiding TDS through a valid declaration does not necessarily mean that no tax will be payable later.
Members should also avoid submitting an incorrect declaration simply to receive their PF money without a deduction. The information provided in Form 121 must accurately reflect their eligibility and estimated tax position.
What EPF Members Should Check Before Withdrawing Money
Employees planning a PF withdrawal should review their service history and estimate their total income for the relevant tax year.
They should also determine whether the proposed withdrawal falls under provisions that require TDS and whether they qualify to submit Form 121.
Those who previously relied on Form 15G or Form 15H will need to familiarise themselves with the new process.
For eligible members, using the correct declaration can help prevent TDS from being deducted when the prescribed conditions are satisfied.
The revised EPFO PF Withdrawal Rules are primarily a change in the paperwork used to claim TDS exemption.
Members should check the latest instructions from EPFO and the Income Tax Department before filing their withdrawal claims, especially if they are unsure about their tax eligibility.
