EPFO rules on TDS for EPF withdrawal: When your PF money is taxed

The Employees’ Provident Fund Organisation (EPFO) has issued instructions explaining the applicability of Tax Deducted at Source (TDS) on Employees’ Provident Fund (EPF) withdrawals.

According to the instructions, TDS on EPF withdrawals depends on specific conditions such as the member’s length of continuous service, availability of Permanent Account Number (PAN), and the amount being withdrawn.

The document states that EPF withdrawals made after completion of five years of continuous service are not subject to TDS, subject to applicable provisions. Where the period of continuous service is less than five years, TDS applicability is determined based on prescribed conditions including the nature and amount of withdrawal.

The instructions further state that PAN is required for processing EPF withdrawal claims. In cases where PAN is not furnished, TDS may be deducted at higher rates as per applicable income tax provisions.

The document also refers to Form 15G and Form 15H, which may be submitted in eligible cases as per income tax rules to seek non-deduction of tax at source, where conditions are satisfied.

EPFO has outlined these instructions to provide clarity on the conditions under which TDS is applicable on EPF withdrawals. The guidelines cover different scenarios based on service duration, PAN availability, and eligibility criteria for tax deduction.

The instructions aim to standardise the process of determining TDS applicability on EPF withdrawals under existing provisions.

PF withdrawal rule change from Tax Year 2026–27

The government has updated the process for claiming TDS exemption on EPF withdrawals starting from the tax year 2026–27.

Earlier, subscribers could use Form 15G or Form 15H to avoid TDS on EPF withdrawals if they met the required conditions. However, these forms will no longer be valid for this purpose going forward.

The change is aimed at simplifying and streamlining the process for tax deduction and exemption on provident fund withdrawals.