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Many of the employees are in a position to utilise their provident fund before serving the five-year period. The EPF withdrawal rules categorise such early withdrawal as taxable events, but there is a totally legal method to make the withdrawal of EPF within 5 years without paying TDS by submitting the Form 15G/15H to EPFO.
Understanding the 5-Year Rule in EPF Withdrawal
The idea of the PF withdrawal tax is such that any amount withdrawn before 5 years of continuous service is counted as income. But, there are some exceptions: If you have transferred the EPF balance from one employer to another, the old employer’s service period will also be included in the 5-year period. This translates to the fact that PF withdrawal will only be triggered if the money is withdrawn, and not simply because of job changes, before 5 years have passed.
In the event that you are compelled to make a pull-out from EPF prior to 5 years, you may be expected to pay taxes known as TDS by the EPFO; however, this is not a given.
When Does TDS Apply on EPF Withdrawal?
The TDS is applicable only for withdrawals of ₹50,000 or more from EPF. If the duration of the service falls below this amount, no TDS will be deducted, irrespective of service duration. After exceeding ₹50,000, however, the next TDS rate, applicable under EPF, is 34% and more:
| Scenario | TDS Rate |
| PAN linked without submission of declaration form | 10% |
| PAN not linked to UAN | Maximum Marginal Rate (34%+) |
| Form 15G/15H submitted (income below taxable limit) | Nil (0%) |
If you don’t connect with the PAN or don’t fill out the declaration form, then you are likely to be deducted EPF TDS 34%, which is a real blow to the take-home.
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Form 15G vs Form 15H: Which One Do You Need?
Eligible EPF members can legally withdraw from EPF without paying any tax on it and avoid EPF TDS by submitting a self-declaration form stating that their total annual income is less than the basic exemption limit. There are two types of this declaration that the EPFO accepts:
- Form 15G: For those aged not more than 60 years (non-senior citizens), Form 15G is required. The total income (as estimated) should not exceed the basic exemption limit (currently ₹2.5 lakh in the old tax regime).
- Form 15H: Only for senior citizens (60 years and over). This form is somewhat easier to qualify for, as the basic exemption limit is increased for seniors.
Both forms have the same objective – to tell the EPFO to refrain from deducting tax on the PF withdrawal, as there is no income on which tax is due.
Note: It is an offence under the Income Tax Act to declare a false return. Fill these forms out only if you truly meet the requirements.
How to Submit Form 15G/15H Online During EPF Claim
The EPFO Unified Member Portal allows for easy submission of your declaration while submitting the claim process online. EPFO withdrawal process step-by-step:
- Enter your UAN and Password on the EPFO Unified Member Portal.
- Click on the Online Services tab and then click on Claim (Form-31, 19, 10C).
- Check the last four numbers of your bank account, which is linked and EPFO-approved.
- Choose the type of claim — a total settlement or partial withdrawal.
- On being prompted by the portal, upload the filled and signed Form 15G or Form 15H in PDF format.
- Fill in the OTP provided on Aadhaar and submit your claim.
If the form is valid and your income comes under the exemption limit specified in the form, then EPFO will not deduct TDS while processing your claim.
Key Conditions to Remember
Please note the following before you try to withdraw EPF before 5 years via this method:
- PAN should be attached to the UAN. Even a valid Form 15G/15G H may not help in preventing the higher rate of TDS without it.
- The amount of withdrawal has to be at least ₹50,000 to trigger the TDS provisions.
- The total income of the year (after withdrawing EPF) should be below the basic exemption limit.
- The declaration should be made prior to withdrawal, not after.
Final Thoughts
There is no need to wait out 5 years or sacrifice your EPF savings for a financial emergency in order to avoid having to pay a chunk of your money in taxes. EPF tax-free withdrawal is completely possible with the help of a linked PAN, a valid Form 15G or 15H and the EPFO’s online claim portal. Knowing what your EPF Withdrawal Rules are and doing the right thing before the EPF is processed can save you thousands of rupees — or even ten thousand — in needless TDS deductions.
If you are unsure, get in touch with a tax expert to ensure you are eligible before completing a self-declaration form.
