How to Avoid TDS on EPF Withdrawal: Form 15G / Form 15H Guide
Important 2026 update: For tax years beginning on or after 1 April 2026, Form 121 replaces the earlier Form 15G/15H framework. EPFO has specifically issued guidance confirming that Form 121 covers PF withdrawals. So, this article explains the familiar 15G/15H rules and the new 2026 Form 121 system. (EPFO India)
How to Avoid TDS on EPF Withdrawal
Employees often worry about tax when withdrawing their Employees’ Provident Fund (EPF) balance before completing five years of service.
The good news is that TDS is not deducted in every EPF withdrawal case.
In many situations, you can avoid TDS because the withdrawal itself is exempt from TDS. In other eligible cases, you may submit the prescribed declaration—Form 15G/15H under the earlier system, or Form 121 for tax years beginning from April 1, 2026—to prevent TDS where your estimated tax liability is nil. (EPFO India)
Let’s understand the rules step by step.
What Is TDS on EPF Withdrawal?
TDS (Tax Deducted at Source) means tax is deducted before the EPF amount is paid to you.
Under the earlier EPF TDS framework, if an employee withdrew ₹50,000 or more before completing five years of service, TDS could apply. EPFO’s current FAQ reflects the ₹50,000 threshold. (EPFO India)
However, several situations can result in no TDS.
Quick overview
| Situation | TDS |
|---|---|
| EPF withdrawal after 5 years of eligible service | No TDS |
| EPF transfer to another PF account | No TDS |
| Certain termination beyond employee’s control | No TDS |
| Eligible withdrawal below applicable threshold | Generally no TDS |
| Eligible early withdrawal + prescribed declaration + PAN | No TDS |
| Early withdrawal without declaration but PAN available | TDS may apply |
| PAN not provided | Higher TDS may apply |
EPFO also states that service with a previous employer can be added to service with the present employer for determining the five-year period. (EPFO India)
When Is TDS Deducted on EPF Withdrawal?
TDS generally becomes relevant when the employee:
- withdraws EPF before completing the required service period,
- crosses the applicable withdrawal threshold, and
- does not qualify for an exemption or valid declaration.
Under the earlier framework, where PAN was furnished and the eligible declaration was not submitted, EPFO’s guidance specified TDS at 10%. Without PAN, a higher rate could apply. (EPFO India)
Important: TDS is different from your final income-tax liability. TDS is only tax collected in advance. Your final tax liability is determined when you file your income-tax return.
How to Avoid TDS on EPF Withdrawal
There are several legitimate ways to avoid TDS.
1. Complete 5 Years of Eligible Service
This is one of the simplest ways to avoid TDS.
If you withdraw your EPF after completing the applicable five-year service period, TDS is generally not deducted.
Your service with your previous and current employers can be combined when calculating the service period, provided the PF is transferred appropriately. (EPFO India)
Example
Suppose:
- Employer A: 3 years
- Employer B: 2.5 years
Total service = 5.5 years
If the previous PF balance was transferred and the conditions are satisfied, the combined service can be considered.
2. Transfer Your EPF Instead of Withdrawing It
If you change jobs, you usually don’t need to withdraw your EPF.
You can transfer the old PF balance to your new employer’s EPF account.
EPFO specifically lists transfer of PF from one account to another as a situation where TDS is not deducted. (EPFO India)
This can also help you continue accumulating retirement savings.
3. Submit Form 15G or Form 15H — Under the Earlier System
Form 15G and Form 15H were self-declarations used by eligible taxpayers to request payment without TDS.
Form 15G
Generally used by eligible resident individuals below 60 years of age, subject to the applicable conditions.
Form 15H
Generally used by eligible resident individuals aged 60 years or above.
The Income Tax Department confirms these age-based categories under the earlier framework. (TDS CPC)
However, there is an important 2026 change.
4. Form 121: The New Form for 2026-27
For a tax year beginning on or after April 1, 2026, the declaration has moved to Form 121 under the Income Tax Rules, 2026.
Form 121 replaces the earlier Form 15G and Form 15H framework. Unlike the old system, both eligible resident individuals below 60 and those aged 60 or above use Form 121, subject to the prescribed conditions. (EPFO India)
The form can cover certain income such as:
- PF withdrawals
- Pension
- Interest
- Rent
- Dividend
- Certain insurance-related income
- Other specified income
EPFO has specifically confirmed that PF withdrawals are covered by Form 121. (EPFO India)
Who Can Submit Form 121?
According to EPFO’s 2026 guidance, eligible persons include:
- Resident individuals below 60 years
- Resident individuals aged 60 years or above
- HUFs and other specified eligible persons
Companies and firms cannot use Form 121, and non-residents are not eligible to submit it. (EPFO India)
The key condition is that your estimated tax on total income for the tax year should be nil, subject to the applicable rules.
Form 121 is not a method to permanently avoid tax. It is a declaration requesting that tax should not be deducted at source when you meet the conditions.
Form 15G vs Form 15H vs Form 121
| Feature | Form 15G | Form 15H | Form 121 |
|---|---|---|---|
| Earlier system | Yes | Yes | No |
| Current from 1 April 2026 | Replaced | Replaced | Yes |
| Age below 60 | Yes, subject to eligibility | No | Yes, subject to eligibility |
| Age 60+ | No | Yes | Yes |
| Used for eligible PF withdrawal | Yes | Yes | Yes |
| Declaration of nil estimated tax | Yes | Yes | Yes |
For tax years beginning on or after April 1, 2026, use Form 121 rather than relying on the old 15G/15H forms. (EPFO India)
Can I Submit Form 15G for PF Withdrawal in 2026?
This is an important question because many older articles still recommend Form 15G and Form 15H.
For Tax Year 2026-27 and later tax years beginning on or after April 1, 2026, the Income Tax Department says the declaration should be furnished in Form 121 under the Income Tax Rules, 2026. (Income Tax Department)
Therefore, don’t blindly follow an old article telling you to submit Form 15G/15H for a 2026-27 withdrawal.
Example: EPF Withdrawal of ₹2 Lakh
Suppose you have:
- EPF balance: ₹2,00,000
- Service: 3 years
- PAN: Available
- Withdrawal: Before 5 years
If TDS provisions apply and you don’t submit the required declaration, TDS may be deducted.
If you satisfy the conditions for the applicable declaration and your estimated tax liability is nil, you may be able to receive the payment without TDS.
For a withdrawal falling under the current 2026 framework, the relevant declaration is Form 121. (EPFO India)
What Happens If You Don’t Submit the Declaration?
If TDS is applicable and you don’t submit the required declaration, EPFO may deduct TDS.
Under the earlier framework, EPFO stated that where PAN was provided but Form 15G/15H was not submitted, TDS could be deducted at 10% in applicable cases. (EPFO India)
If PAN is not furnished, a much higher rate may apply.
So, keeping your PAN linked with your UAN is important.
Is EPF Withdrawal Tax-Free After 5 Years?
In general, an EPF withdrawal after the applicable five-year period is not subject to TDS under the EPFO TDS rules.
EPFO also clarifies that service with previous and current employers may be combined for calculating the five-year period. (EPFO India)
However, TDS rules and final income-tax treatment are not exactly the same thing. Your overall tax position can depend on the circumstances of the withdrawal.
Situations Where TDS May Not Apply
According to EPFO guidance, TDS is not deducted in several situations, including:
EPF transfer
If you transfer your PF balance to another PF account, TDS does not apply.
Withdrawal after the required service period
Withdrawal after five years of eligible service is generally outside the TDS requirement.
Certain termination situations
TDS may not apply where employment ends because of circumstances such as ill health or certain situations beyond the employee’s control. (EPFO India)
Eligible declaration
Where the employee qualifies and submits the prescribed declaration with PAN, TDS can be avoided. (EPFO India)
Common Mistakes to Avoid
Mistake 1: Using an Old Form
Many websites still say:
“Submit Form 15G or Form 15H.”
That advice may be outdated for tax years beginning from April 1, 2026.
The new declaration is Form 121. (Income Tax Department)
Mistake 2: Submitting the Form Without Checking Eligibility
A declaration should only be submitted when you meet the applicable conditions.
Do not submit a false declaration just to avoid TDS.
Mistake 3: Forgetting Previous Employment
Your previous PF service can matter when determining whether you have completed the required service period.
Mistake 4: Not Providing PAN
PAN is important for EPF withdrawal and TDS processing.
Mistake 5: Thinking TDS Means Final Tax
TDS is not necessarily your final tax liability. It is a tax deduction made at source.
Frequently Asked Questions
Can I avoid TDS on EPF withdrawal?
Yes, depending on your situation. Common ways include completing the applicable service period, transferring your PF instead of withdrawing it, qualifying for a TDS exemption, or submitting the applicable declaration when you meet the conditions.
Is Form 15G still valid for EPF withdrawal?
For tax years beginning on or after April 1, 2026, Form 121 replaces the earlier Form 15G/15H declaration framework. (Income Tax Department)
What is Form 121?
Form 121 is the new declaration under the Income Tax Rules, 2026 for eligible taxpayers who want specified income to be paid without TDS when their estimated tax liability is nil. PF withdrawals are included. (EPFO India)
Is Form 121 compulsory?
No. EPFO states that it is not mandatory. It is used by eligible taxpayers who want to avoid TDS and satisfy the applicable conditions. (EPFO India)
Can senior citizens use Form 121?
Yes. Under the new framework, eligible resident individuals both below 60 and aged 60 or above can use Form 121, subject to the prescribed conditions. (EPFO India)
What if I withdraw PF after five years?
Generally, TDS is not deducted when the applicable five-year service condition is satisfied. Previous and current employment service can be relevant to the calculation. (EPFO India)
What happens if TDS has already been deducted?
TDS is not necessarily your final tax liability. If excess tax was deducted, you may be able to claim the appropriate refund through your income-tax return, depending on your overall tax position.
Final Checklist Before EPF Withdrawal
Before submitting your EPF withdrawal claim, check:
- ✅ Have you completed the applicable five-year service period?
- ✅ Did you transfer your previous PF balance?
- ✅ Is your PAN linked/available?
- ✅ Is your UAN and KYC information correct?
- ✅ Does TDS apply to your withdrawal?
- ✅ Are you eligible for the applicable declaration?
- ✅ For tax years beginning from April 1, 2026, have you checked Form 121 instead of relying on old Form 15G/15H information?
- ✅ Is your estimated total tax liability actually nil?
Conclusion
Avoiding TDS on EPF withdrawal is possible only when you meet the applicable conditions. The easiest route is generally to avoid premature withdrawal by transferring your PF and completing the required service period.
If you are making an eligible early withdrawal and your estimated tax liability is nil, the applicable declaration can help you receive the payment without TDS.
One major 2026 update is especially important: the old Form 15G/Form 15H system has been replaced by Form 121 for tax years beginning on or after April 1, 2026. EPFO and the Income Tax Department have both published guidance on this change. (EPFO India)
Disclaimer: This article is for educational purposes only and should not be treated as tax or legal advice. EPF and income-tax rules can change, so verify the applicable rules before submitting a withdrawal or tax declaration.
Suggested internal links for EPFWala:
- EPF Withdrawal Rules
- EPF Advance Rules
- How to Withdraw PF Online
- UAN KYC Update
- EPF Transfer Online
- EPF Tax Rules
- EPF Interest Rate
- EPFO 3.0 Guide