As per the Income Tax Act in India, numerous types of payments and receipts are subject to TDS, or Tax Deducted at Source, through which the government collects tax right at the source in a way to curb evasion. TDS does exist on EPF (Employee Provident Fund) withdrawals too. However, there are specific conditions to it. Even then, if eligible, TDS can be waived off by filling out Form 15G.
But what is Form 15G? How can Form 15G for PF be used? And how to fill and submit Form 15G EPFO? Who all are eligible for it, and how is it different from Form 15h for PF withdrawal?
In this article, we have answered all these questions to help you understand the use of EPF Form 15G.
What are EPF and EPFO?
Employee Provident Fund (EPF) is a fund jointly contributed by the employer and employee in equal proportion for the employee’s welfare. A part of the salary is deducted as a PF deduction from the employee invested in the provident fund. In India, EPFO – Employees’ Provident Fund Organisation is responsible for the regulation and management of EPF, i.e., Employee Provident Fund.
What is Form 15G For PF/15G Form EPFO?
Form 15G is a declaration made by a taxpayer that they fulfil the necessary conditions laid down in Form 15G and hence can be exempted from Tax Deducted at Source (TDS) when it comes to interest income or Provident Fund Withdrawals during the given assessment year. The eligibility conditions are based on the age of the taxpayer, years served during employment, annual income, total interest income, and reason for unemployment. We have discussed these in detail in the following sections!
- Form 15G For PF/15G Form EPFO can be used to avail exemption from tax deducted at source, fulfilling the eligibility criteria.
- The eligibility conditions are around age, tenure, annual income, interest income, and unemployment reasons, which one must be mindful of while filing Form 15G.
- Form 15G can also be used to avail exemption on interest income, like that on fixed deposits on meeting the eligibility criteria.
- A separate form exists for the elderly – Form 15 H, which they can use to claim exemption from tax deducted at source.
Who all are eligible for claiming exemptions under Form 15G For PF/15G Form EPFO?
By now, we know the meaning of the 15G Form meaning and what is its primary objective, or simply what it is for. But is everyone eligible to claim the exemption from tax deducted at source when it comes to interest income or PF withdrawals by filling in Form 15G? There are conditions to it as to who is eligible for Form 15G For PF/15G Form EPFO. Let’s discuss them in detail:
- Only individuals or persons under 60 years are eligible for Form 15G and not any sort of company or a firm.
- The said individual must be a resident Indian during the financial year for which exemption is being claimed.
- Total interest income for the financial year is less than the basic exemption limit of INR 2,50,000 (FY 2021-22). Interest income earned from all the combined sources during the financial year should be less than INR 2,50,000.
- Tax liability on the individual’s total income for the financial year in question is zero. If the income is within the taxable limits, then TDS exemption cannot be claimed under Form 15G.
- The overall tenure of employment is less than 5 years for claiming TDS exemption against EPF withdrawals as post 5 years, EPF is automatically exempted from TDS and hence no need to fill Form 15G. Also, unemployment, where tenure is less than 5 years, should be a cause beyond the control of an employee, like sickness or closure of business.
Let’s try and understand this better with the help of a quick example. You are an individual with 3 years of work experience, aged 32 years, with a total income before any deductions at INR 2,00,000, out of which interest income is INR 1,50,000. You can claim the exemption via Form 15G from the 10% TDS deduction, otherwise deducted from interest income and PF withdrawals.
Where does one use Form 15G?
Upon fulfilling the eligibility criteria, Form 15G can be used for multiple scenarios like
- To claim exemption from TDS deduction against bank deposits, be it savings account, fixed deposits, or any other kind of deposit on which interest income is earned.
- Form 15G, as we discussed, can be used to claim exemption against PF withdrawals.
- Exemption from TDS against post office interest-bearing deposits.
- To seek exemption against interest earned on National Savings Scheme (NSS).
How and where to fill Form 15G For PF/15G Form EPFO?
Form 15G PDF can be downloaded online from the EPFO’s website, Income Tax Department’s website, and bank’s websites and can also be obtained physically by visiting branches of these organisations. Following are the details which need to be filled in:
- Name of the Assessee – As per PAN card or income tax records.
- Legal Status – Whether a resident/HUF or any other legal status.
- Permanent Account Number – Without a valid PAN number, Form 15G cannot be submitted.
- Previous Year – The Financial Year (FY) for which exemption is sought.
- Residential Status – Only Indian residents can claim exemption from TDS.
- Whether previously assessed to tax, if yes, which assessment year – If your income has been within the taxable limits during the past 6 years, you will need to specify during which assessment year.
- Estimated income for which declaration is made – Total interest income or amount of PF withdrawal.
- Estimated total income of the previous year – Total income earned during the financial year from all sources combined.
- If Form 15G has been filled previously, and the aggregate income for which the form was filed.
- Details of the income being declared for exemption – Amount of income, bank account number, UAN & PF account number, etc.
How is Form 15G different from Form 15H?
As we discussed above, one of the conditions to be eligible for claiming TDS exemption under Form 15G is being of age less than 60 years. In cases where the age of the assessee is beyond 60 years, Form 15H needs to be filed instead. So, it can be concluded that Form 15H is simply the elderly version of Form 15G, as both are used to claim exemption against TDS deducted on interest income or PF withdrawals.
Did You Know?
As per the old Income Tax Act rules, TDS or Tax Deducted at Source was charged on an interest income from products like a savings account, fixed deposits, recurring deposits, etc., if the total interest was found to exceed INR 10,000 in a given financial year. However, in the Interim Budget of 2019, this limit was revised to INR 50,000 with effect from FY 2019-2020 as a major relief to taxpayers!
Words to Remember
- Tax-Deductible Investments – These are those investments towards which if you invest any money to a certain limit, then the same can be deducted when calculating your income to calculate your tax liability.
Now we know where and how to use Form 15G For PF/15G Form EPFO and how helpful it can be to claim an exemption from tax deducted at the source to which our EPF withdrawals might be subjected. However, as we discussed, there are certain conditions that one needs to fulfil to claim exemption using Form 15G. It is important to remember that the correct form to seek exemption for residents beyond 60 years is Form 15H.
No, an assessee simply needs to submit the form to the deductor to fulfil the necessary conditions and not to the Income Tax Department.
No, any individual whose income is within the taxable limit is rendered ineligible to claim TDS exemption using Form 15G.
For a person with a tenure of more than 5 years, EPF withdrawals are automatically exempted from TDS deduction. Hence there is no need to fill Form 15G.
In case you have missed out on filling the Form 15G, and TDS has been deducted, you can still get it back at the time of filing your Income Tax Return (ITR) if your overall tax liability is lesser than what you have already paid as per Form 26AS.
False declaration in Form 15G, amounts to an offence and can lead to a fine and imprisonment under the Income Tax Act.