Introduction
Importance of Form 15G in PF Withdrawal: The Employee Provident Fund (EPF or PF) serves as a vital welfare fund for employees, with 12% of their basic salary being regularly allocated to their provident fund account. Withdrawal of the PF balance is permissible in accordance with stipulated PF withdrawal rules. However, it’s essential to be aware of the Income tax implications and use of Form 15G associated with PF withdrawal.
As per section 192A of the Income Tax Act, Tax Deducted at Source (TDS) is applicable when the withdrawal amount exceeds Rs 50,000, and the tenure of employment is less than 5 years. To mitigate TDS deductions, individuals can fill out Form 15G, provided their income falls below the taxable limit. Notably, submission of PF Form 15G is specifically required at the EPFO online portal and not at the Income Tax Department.
Form 15G, also known as EPF Form 15G, acts as a protective measure to ensure that no TDS is deducted on the interest accrued from EPF, Recurring Deposits (RD), or Fixed Deposits (FD). This form is designed for individuals below 60 years of age and Hindu Undivided Families (HUFs). Conversely, individuals aged 60 years and above are advised to utilize Form 15H for this purpose.
(i) 10% TDS: if you submit your PAN card but fail to submit Form 15G
(ii) 30% TDS: if you fail to submit both your PAN card and Form 15G
(iii) No TDS: if you submit Form 15G.
Cases When TDS not Applicable on EPF Withdrawal
Understanding the scenarios in which Tax Deducted at Source (TDS) is not applicable on Employee Provident Fund (EPF) withdrawal is essential for individuals navigating the taxation landscape.
Firstly, when an individual transfers their EPF account to another account, TDS is not levied, offering a seamless transfer process for the employee. Secondly, in cases where termination of service is a result of ill health, discontinuation of business by the employer, completion of a project, or other circumstances beyond the employee’s control, TDS is also not applicable, providing relief during challenging times.
Moreover, when an employee withdraws their EPF amount after completing a total of 5 years of service, TDS is not deducted, incentivizing long-term contributions to the fund. Additionally, if the EPF amount is less than Rs. 50,000, and the employee’s tenure of service is less than 5 years, TDS is not applicable, making smaller withdrawals more tax-friendly.
Lastly, even if an employee withdraws Rs. 50,000 or more with less than 5 years of service, submitting Form 15G or 15H along with the PAN Card ensures that TDS is not deducted, empowering individuals to manage their tax liability efficiently.
Process of Downloading Form 15G Online
Begin by visiting the EPFO’s online portal, where you’ll find an array of services available for your convenience. Navigate to the “online services” section and locate the “online claim” option. Click on this option to commence the process of initiating your claim for PF withdrawal.
As part of the claim initiation, you’ll need to input all the necessary details as requested. This step is crucial to ensure accurate processing of your withdrawal request. Additionally, the system will prompt you to verify the last four digits of your phone number, further validating your identity and claim.
Once the verification is complete, you’ll gain access to the PF withdrawal form. Look for the “upload Form 15G” option within the interface, designed to provide a straightforward approach to obtaining the required form. Click on this option to download the form directly to your PC or mobile device.
With the form in your possession, fill out Part 1 with the appropriate and accurate information. Subsequently, convert the filled form into a PDF format to ensure compatibility and ease of use. This is a pivotal step to prepare the form for submission.
Lastly, when initiating your online claim for PF withdrawal, utilize the uploaded PDF copy of the completed Form 15G. By adhering to this process, you can ensure a seamless experience when submitting your claim and seeking to avoid TDS deductions through the proper declaration of your income.
Tips on Filling-up Form 15G
In Section 1, individuals aiming to avoid TDS deductions need to provide essential personal details:
- Full name as per registered documents.
- PAN card information.
- Income tax status, specifying if you are an individual, part of a Hindu-Undivided Family (HUF), or associated with any trust.
- Residential status, complete address with PIN code.
- Contact information: E-mail ID and phone number.
- Confirmation of tax assessment under the Income Tax Act 1961, indicating the latest assessment year of returns.
- Estimation of income for which the declaration is being made.
- Furnishing the details of investment interest income, including your PF account number.
In Section 2, the form is to be completed by the individual depositing TDS on behalf of the tax assessee, known as the deductor.
Eligibility Criteria For Submitting Form 15G
- Individual Applicants: Form 15G can only be furnished by individuals, not firms or companies, ensuring it’s tailored for personal use.
- Residency Requirement: Applicants must be either a resident of India or a Hindu Undivided Family (HUF), emphasizing compliance with Indian tax regulations.
- Age Limitation: The age of the applicant should be 60 years or below, indicating the form’s applicability for a specific age group.
- Nil Tax Liability: To be eligible, the computed tax amount on the total income, including the PF balance withdrawal, for a financial year should be nil. This underlines its utility for those below the taxable income threshold.
- Accuracy and Completeness: It’s crucial that the information provided in the form is true, accurate, and complete, emphasizing the importance of honesty and precision in the declaration.
Penalties for Filing False Declaration in Form 15G
Submitting a false declaration on Form 15G to evade Tax Deducted at Source (TDS) carries serious consequences as outlined in Section 277 of the Income Tax Act, 1961. The penalties for such actions are severe:
- Imprisonment Duration: If a false declaration is made with the intent to evade taxes exceeding INR 1 Lakh, the individual may face imprisonment ranging from six months to seven years.
- Other Cases: In situations where the false declaration is made for tax evasion amounts less than INR 1 Lakh, the individual could be imprisoned for a period ranging from three months to three years.
These penalties underscore the importance of providing accurate and truthful information on Form 15G. Any attempt to deceive tax authorities can result in substantial legal consequences, emphasizing the need for compliance and honesty when using this form to avoid TDS.
To Download the Form 15G CLICK HERE
To access the CBDT Notification No. 88/2023 CLICK HERE
ITAT Removes Penalty on Voluntary Deposit of Tax Prior to Receiving Notice: Order Dt.04.10.23