Am I Eligible to Submit Form 15G?

Posted in Income Tax Blogs By Finserv MARKETS - Nov 26,2019
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More than 6 crore employees are a part of the Employees’ Provident Fund Organisation (EPFO) today. The payroll data reveals that more than 60 lakh jobs alone were created in FY2019. In August this year the net employment creation in the formal sector was 10.86 lakh out of which the highest number of jobs were created for those in the 22 to 25 age group followed by those between 18 to 21 years of age.

If you are a working professional you might already be enrolled in EPF scheme with you and your employer both contributing 12 percent each out of your salary every month. This amount earns interest as decided by EPFO. It helps you save for your retirement. The good news is that the consolidated amount is totally tax-free when you retire, so you do not need to pay any tax upon final withdrawal.

When you change jobs, you need to remember to transfer your existing PF account to your new company so that you can continue reaping its benefits. If you have completed 5 years in an organisation where an active contribution was being made towards your EPF for that period, TDS is not applicable when you withdraw EPF.

Even if you worked with several companies while retaining the same EPF account for more than 5 years, the combined service period will be considered eligible for TDS exemption upon withdrawal.

However, if either your period of active enrollment in the EPF is less than 5 years( supposing you left your account idle with no contribution), or you have worked with an organisation for less than five years, when you withdraw EPF, you will attract TDS for that particular financial year. There is a way you can save taxes in such a situation too with a little knowledge on PF form 15G.

Suhasini had been working with an IT firm for 3 years now. She had recently been engaged and her fiancé was settled abroad. She was planning to put her papers soon after marriage since she would be shifting to the US. When she shared this news with her colleagues, everyone congratulated her.

Over lunch her colleague Revati, who was senior to her, advised her to talk to the human resources department about her PF dues. She also asked Suhasini to submit form 15G so that her final PF amount is not taxed. Suhasini had no clue if she was eligible for it.

If you too know little about PF form 15G like Suhasini, remember there might not be someone like Revati around to help you everytime. Hence you need to gather information on not how to avoid TDS when you withdraw EPF, but also know your eligibility to submit form 15G.

Here are Basic eligibility for Form 15G

1.You should be a resident Indian to apply

2.You should be below 60 years of age

3.The tax calculated on your total income should be nil

4.The total interest on the income for the year should be less than the basic exemption limit of that year(eg. Rs.2.5 lakh for financial year 2019-20)

PF form 15G cannot be filled by a company. Only an individual or HUF or trust or any other assessee is eligible. Remember to submit form 15G alongwith your PAN if your PF amount is more than Rs 50,000 after working in a company for less than five years and you wish to withdraw it. If you do not submit your PAN but just form 15G, a 10 percent TDS might be deducted, while failure to submit both attracts a tax deduction to the tune of 34 percent.

If you are looking for emergency funds, you can also consider personal loans from Bajaj Markets. In case you are using the loan amount towards the purchase, construction or renovation of your home, you shall be eligible for tax benefit on the interest. And if you are utilising it for a rented property you can claim deduction on the entire amount.

While you can withdraw from your PF account after few years of service, you might want to save it for retirement. Instead, there are several loans available on Bajaj Markets that can help you buy a new car, or pay EMIs for your home or even finance a Eurotrip. You can take a business loan, home loan, vehicle loan and even a travel loan hassle-free available on Bajaj Markets for all such needs. Do not let insufficient funds stop you from living your life!. Also read what is the impact of GST on personal loan only at Bajaj Markets.

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