Tax deducted at source (TDS) is an important tax rule under Income-tax, 1961. The Income Tax Department prescribes TDS limits on interest, income, and withdrawal, and exceeding that will require a financial institution to deduct TDS and send it to the department.

So, what these forms are meant for?

Form 15G And 15H:

Forms 15G and 15H are used to seek TDS exemption from certain investments. The only difference is that 15G is for individuals below 60, and 15H is for individuals 60 and above.

These forms are valid for a year. Investors must fill them out yearly if the income doesn’t exceed the taxable limit. If it exceeds the limit and form 15G/H has been submitted, they must calculate the income not deducted in TDS and pay tax accordingly before filing an income tax return.

So, whenever TDS is deducted, they must submit forms 15G or 15H;for example, bank interest exceeding Rs 40,000 for the general public and Rs 50,000 for senior citizens in a year, Employees’ Provident Fund (EPF) withdrawals exceeding Rs 50,000, rental income, dividend income, etc. They can avoid TDS by using these forms.

Also Read: How Do You Estimate A Retirement Corpus And Are There Any Thumb Rules?

How Is TDS Deducted In EPF?

TDS is deducted from an EPF account if the withdrawal amount exceeds over Rs 50,000,subject to the following conditions:

• Withdrawal is done in less than five years of service.
• If PAN is not updated in the EPF account.

When Is TDS Not Deducted?

• Withdrawal is less than Rs 50,000.
• Withdrawal is after five years.
• Transfer of EPF from one account to another.
• Termination of service due to health, or any other reasons not in the employee’s control.

Also Read: What Is PM Vishwakarma Yojana? Can Senior Citizens Participate In This Scheme?

EPF is one of the biggest social security schemes with some 27.7 crore members, so it is important to know to use this financial product effectively for retirement planning. It stipulates contributions from the employee and employer and is tax-exempt for deposits, accrual, and maturity. The TDS liability arises only in certain circumstances discussed above.