Avoiding TDS: What are 15G/15H forms? Who needs them and why?

If you are an EPF (Employees Provident Fund) subscriber, and at the time of withdrawal, you do not want TDS (tax deducted at source) to be deducted, you need to fill out form 15G. The TDS is deducted either by the bank at the time of transferring interest income to account holder’s account, or by EPFO at the time of transferring the withdrawal money into the account of the subscriber.

This is a self-declaration form, which is also given on the EPFO’s website. 

What are forms 15G and 15H?

Form 15G is a self-declaration form filled by income tax payers to ensure that the TDS (tax deducted at source) is not deducted by the bank or EPFO on EPF withdrawal. When senior citizens fill this self-declaration form, it is ‘form 15H’.  

This is a mandatory form and one has to fill it to avoid paying the TDS. If the form is not filled, a TDS of 10 percent is deducted at the time of withdrawal of EPF account balance or transferring interest income to depositors by the bank. 

Meanwhile, if you withdraw the EPF account balance without having access to PAN, the outstanding income tax will be 30 percent. You can fill the form online. These are the details one has to fill on form 15G: subscriber’s name, PAN, income tax status i.e., individual or HUF, residential status, address, email ID and phone number.

There are certain exceptions in which TDS is not deducted such as when service is terminated due to ill health, when the company shuts down and other reasons beyond the control of the employee. 

Let us summarise the details in the following points:

1. To avoid getting tax deducted at the time of EPF withdrawal, you must fill form 15G.

2. This is a mandatory form that has to be submitted by all EPF subscribers who are withdrawing more than ₹50,000 and have spent less than five years in the service.

3. This form is required to be submitted when you want to avoid paying TDS on your fixed deposits (FDs). The exemption is given to depositors when their interest income is less than R 40,000 for those under 60 and ₹50,000 for those above 60.

4. Failure to fill up this form leads to deduction of 10 percent of tax deducted at source.

5. The form which senior citizens have to fill to avoid deducting income tax is form 15H.