If you are planning to withdraw money from your Employees’ Provident Fund (EPF) account before completing five continuous years of service, then tax deducted at source (TDS) may apply if the withdrawal amount exceeds ₹50,000. However, there are some exemptions and eligible EPF members can avoid such deductions by submitting the required declarations.
This exemption applies to those whose estimated tax liability for the financial year is nil. Such taxpayers can submit a declaration in ‘Form 121’ under the Income Tax Act, 2025 to ensure that there is no TDS on your eligible income.
Earlier there were two forms that served the same purpose but for people of different age groups. Both Form 15G and Form 15H have now been replaced by a single, unified Form 121. The old forms were particularly used by individuals and senior citizens with low taxable income to prevent unnecessary TDS deductions.
Who should file Form 121?
Form 121 can be filed by resident Individuals (whether below 60 years or 60 years and above), Hindu Undivided Families (HUFs), and other specified eligible entities that meet the stipulated criteria.
However, companies and firms are not eligible to file Form 121. Similarly, non-residents are also not eligible to file this form, according to Employees’ Provident Fund Organisation (EPFO) rules.
Earlier Form 15G was meant for resident individuals (below 60 years) and HUFs with no tax liability for the year, and with total interest income below the basic exemption limit. Similarly, Form 15H was previously used by resident individuals aged 60 years or more with estimated total income below the taxable limit after considering deductions.
After the change, both these forms were integrated into an unified form, though the eligibility criteria remains the same. Both senior citizens and resident individuals can use this form to avoid TDS on their EPF withdrawals.
People must also note that this form must be furnished to payer before income is credited or paid, for example, at the beginning of the tax year or before the first payment, according to EPFO.
Income limits for Form 121 eligibility
Form 121 can be submitted only if a person’s estimated total taxable income for the financial year is below the applicable basic exemption limit, meaning your final tax liability is expected to be nil. Here’s income limits for Form 121 eligibility:
— Under the old tax regime
- ₹2.5 lakh basic exemption limit for individuals below 60 years
- ₹3 lakh for senior citizens
- ₹5 lakh for super senior citizens
— Under the new tax regime
- ₹4 lakh basic exemption limit for individuals
Only if your estimated taxable income remains within these limits and no tax is payable, you may be eligible to submit Form 121 to avoid TDS on eligible income.
Documents required to file Form 121
According to EPFO, there are some documents that you must possess and submit if you want to avoid TDS by filing Form 121. These include:
- PAN of the declarant (mandatory) and TAN of Payer.
- Proof of age
- Details of income/investment for which no TDS is to be deducted.
- Bank account details (for interest-bearing instruments).
Speaking about the advantages of adopting a unified form, Siddharth Maurya, Managing Director, Vibhavangal Anukulkara Pvt Ltd, said that the approach “minimizes the form selection dilemma and reduces the burden of duplicate information. The clarity and simplicity of the forms make the electronic filing process much easier, especially for less-experienced taxpayers.”
About the Author
