Major update for those withdrawing money from PF: New form must now be filled for TDS exemption..

The Employees' Provident Fund Organisation (EPFO) has announced changes to the rules regarding TDS (Tax Deducted at Source) exemptions for employees withdrawing money from their PF accounts. Starting from the 2026-27 tax year, Form 121 must be used instead of Form 15G and Form 15H to request an exemption from TDS on EPF withdrawals. According to the EPFO, eligible PF members can now claim this TDS exemption using the new form under the Income Tax Act, 2025.

Therefore, if you plan to withdraw money from your PF account in the near future, it is important to understand the new form and the rules regarding eligibility.

**Previously, the option was available via Forms 15G and 15H**
Until now, eligible individuals could submit Form 15G or Form 15H when withdrawing money from their PF. Through these forms, the individual would declare that their estimated annual income did not attract a tax liability and, consequently, TDS should not be deducted from the withdrawal. Form 15G was used by eligible individuals under the age of 60, while Form 15H was intended for senior citizens. However, from the 2026-27 tax year onwards, these two forms will no longer be valid for claiming TDS exemption on EPF withdrawals. Submitting the old forms will not prevent TDS deduction.

**Will PF withdrawal become tax-free with Form 121?**
No, it is important to understand that submitting Form 121 does not automatically make the PF withdrawal tax-free. This form merely allows an eligible individual to request that TDS not be deducted. For this to apply, the individual's estimated total income for the relevant financial year must not attract any tax liability, and they must meet the prescribed conditions.

This provision has been introduced under Section 393(6) of the Income Tax Act, 2025. This law has come into effect on April 1, 2026. Not everyone is eligible to avail the benefits of Form 121; Non-Resident Indians (NRIs) and individuals whose estimated income attracts a tax liability cannot use this facility. Additionally, in accordance with EPFO ​​guidelines, possessing a valid PAN is mandatory; any form submitted without a PAN will be considered invalid.

The process for submitting Form 121 will also be online.
The EPFO ​​has instructed its regional offices to issue a Unique Identification Number for Form 121. Provisions are also being made to facilitate the online submission and e-signing of the form, which could simplify the identification and tracking of applications. Employees planning to withdraw funds from their PF accounts should first verify their eligibility; if they meet the criteria for TDS exemption, they will be required to submit Form 121 in accordance with the new regulations.

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