Archive · 11 Oct 2026
Form 121 Does Not Make EPF Withdrawals Tax-Free
Form 121 is a form some people can give when withdrawing money from their EPF.
It may help stop tax from being taken out of the payment at that time.
But it does not automatically mean the withdrawal is tax-free.
Whether tax applies can depend on how long the person worked, how much they withdraw, and their other income.
Withdrawals before five years of continuous service may be taxable, although exceptions can apply.
The article says eligible premature withdrawals above Rs 50,000 generally face TDS rules.
People should check whether they qualify before submitting the form.
If tax is due, they may still have to report the withdrawal and pay it later.
From tax year 2026-27, eligible taxpayers use Form 121 instead of the earlier Forms 15G or 15H.
EPF withdrawals before five years of continuous service may be taxable, subject to applicable exceptions.
Eligible premature withdrawals above Rs 50,000 generally attract TDS; a valid PAN may result in a 10% rate under applicable rules.
Form 121 is for eligible taxpayers whose estimated tax liability for the relevant year is nil.
A declaration preventing TDS does not itself exempt taxable withdrawal income or remove income-tax return obligations.
- Who
- EPF subscribers considering a withdrawal and taxpayers who may be eligible to submit Form 121.
- What
- A guide to checking service history, withdrawal amount, income, Form 121 eligibility and tax-return obligations.
- When
- Form 121 is to be used for withdrawals from tax year 2026-27 under the new framework.
- Where
- For EPF withdrawals; the article identifies the Employees' Provident Fund Organisation's rules.
- Why
- To help subscribers assess tax treatment and TDS before withdrawing, and avoid mistaking a TDS declaration for a tax exemption.
TDS relief
Underlying tax liability
Effect of Form 121
TDS relief
An eligible taxpayer with nil estimated tax liability may submit Form 121 to prevent TDS, if prescribed conditions are met.
Underlying tax liability
The form does not make a taxable EPF withdrawal tax-free; the taxpayer may still need to report it and pay tax due.
- Form
- Form 121 replaces the earlier Forms 15G and 15H under the Income-tax Act, 2025, and Income-tax Rules, 2026.
- Start period
- Eligible taxpayers should use Form 121 for withdrawals from tax year 2026-27.
- Service period
- EPF withdrawals before five years of continuous service may attract tax, subject to applicable exceptions.
- TDS threshold
- TDS generally applies to eligible premature EPF withdrawals exceeding Rs 50,000.
- PAN rate
- With a valid PAN, the applicable TDS rate is 10%, subject to relevant provisions and exceptions.
- Form 121 condition
- The form is intended for eligible taxpayers whose estimated tax liability for the relevant tax year is nil.
- Tax-return obligation
- Preventing TDS does not exempt taxable income or remove the obligation to report it and pay tax due.