Employees withdrawing money from their Employees’ Provident Fund (EPF) will need to follow a new process to claim exemption from tax deducted at source (TDS). The Employees’ Provident Fund Organisation (EPFO) has clarified that Forms 15G and 15H will no longer be accepted for claiming EPF TDS exemptions from tax year 2026-27 onwards. Members will instead have to submit Form 121, in line with the Income Tax Act, 2025.
In a post on social media platform X, EPFO said that Form 121 must be submitted to claim TDS exemption from tax year 2026-27. The change means EPF members who were previously using Form 15G or Form 15H for this purpose will need to familiarise themselves with the new declaration form.
Under Section 192A of the Income Tax Act, 2025, TDS may be deducted when an employee withdraws money from their EPF before completing five years of continuous service.
The five-year service requirement is important when determining whether a withdrawal attracts TDS. Employees planning to withdraw their EPF savings should check their total service period and the amount they intend to withdraw before submitting a declaration to avoid tax deduction.
Form 121 is a declaration prescribed under the Income Tax Rules, 2026. According to the Income Tax Department’s portal, taxpayers use it to declare that the tax payable on their estimated total income for the relevant tax year is nil.
Once the declaration is submitted, the payer, also known as the deductor, may be permitted to make specified payments without deducting TDS, provided the taxpayer meets the applicable conditions.
For EPF members, Form 121 can be used to seek exemption from TDS on eligible withdrawals. However, submitting the form does not automatically guarantee an exemption. Members must meet the relevant eligibility requirements before making the declaration.
EPF members planning to withdraw their savings should check whether they have completed five years of continuous service, whether the withdrawal exceeds Rs 50,000 and whether their estimated total income makes them eligible to submit Form 121.
The declaration should be made only if the conditions for claiming the exemption are met. Those who do not qualify may still be liable for TDS under the applicable rules.
The key change is that Form 121 will replace Forms 15G and 15H for claiming EPF TDS exemptions from tax year 2026-27. Members should therefore check the latest instructions on the EPFO and Income Tax Department websites before submitting their withdrawal claims.