The Employee Provident Fund is a fund designed for the benefit of employees. Every month, 12% of an employee’s basic salary and dearness allowance is contributed to the fund account, with a matching contribution from the employer. The fund balance earns an annual interest of 8.10%.
If you wish to withdraw your PF balance, you must follow the PF withdrawal rules. However, please note that if the withdrawal amount exceeds Rs. 50,000 per financial year, TDS (Tax Deducted at Source) will be deducted in accordance with section 192A of the Income Tax Act. As a result, you will only receive the remaining balance.
If your FD income is below the taxable limit of Rs. 40,000 in a year, you can avoid TDS deductions on your withdrawal amount by filling out PF form 15G.
Eligibility for Form 15G Submission
- You must be an individual or a person (other than a company or a firm).
- You must be a resident Indian for the relevant financial year.
- Your age should not exceed 60 years.
- Your tax liability, calculated on the total taxable income for the financial year, should be zero.
- Your total interest income for the financial year should be below the basic exemption limit.
When is TDS applicable for EPF withdrawal?
- If an employee wishes to withdraw an EPF amount greater than or equal to Rs. 50,000 and has less than 5 years of service, TDS will be deducted.
- If an employee submits their PAN card but does not submit Form 15G or 15H for EPF, TDS will be deducted at a 10% rate.
- TDS will be deducted at a 34.608% rate if the employee fails to submit a PAN card and Form 15G/15H.
When is TDS not applicable for EPF withdrawal?
- When an employee transfers their EPF account to another account.
- When termination of service is due to the sickness of the employee, discontinuation of business by the employer, and completion of a project.
- When the EPF amount is less than Rs.50,000, but the employee has rendered service for less than 5 years.
- In case the employee withdraws more than Rs.50,000 or has equal employment of less than 5 years but still submits Form 15G/15H along with their PAN card.
Sample – Form No 15G
How to Fill Form 15G
Fill out only Part I of the form.
- Enter your name as per your PAN Card in the ‘Name of the Assessee (Declarant)’ field.
- Enter your valid PAN card number in the ‘PAN of the Assessee’ field. Note that only individuals can submit Form 15G.
- Select ‘Individual’ as your income tax status.
- Select the financial year in which you are claiming the non-deduction of TDS in the ‘Previous Year’ field.
- Mention ‘Resident’ as your residential status.
- Enter your address and PIN code.
- Provide a valid email ID and contact number.
- Tick ‘Yes’ if you have filed an ITR in any of the last few years. Mention the latest assessment year for which you were assessed.
- Mention the estimated withdrawal amount in the ‘Estimated income for which this declaration is made’ coloum.
- Mention the total estimated income of the financial year in which you plan to withdraw the PF amount in the ‘Estimated total income of the PY in which income from column 16 to be included’ field.
- If you have filed another Form 15G during the financial year, mention the total number of forms filled and the total income amount of all these forms.
- In the last part of the form, provide the following income details
- Section under which tax is deductible: 192A
- Investment account no: UAN Account no
- Nature of Income: PF Withdrawal
- Amount of Income: Withdrawal Amount
How to submit Form No 15G
- Log in to the EPFO UAN portal.
- Select ‘Online Services’ and click on ‘Claim.’
- Enter your bank account number for verification and click on ‘Verify.’
- Click on ‘Upload Form 15G’ under the ‘I want to apply for’ option.
Submitting a False Declaration in Form 15G Result
To avoid TDS, submitting a false declaration in Form 15G can result in a penalty, including imprisonment, under Section 277 of the Income Tax Act, 1961. The penalties under this section are as follows:
- Imprisonment for a period of 6 months to 7 years if the wrong declaration was provided to evade tax of more than Rs. 1 lakh.
- Imprisonment between 3 months to 3 years for all other cases.