Even if your total income, including PF withdrawal, exceeds 2.5 Lakhs, you can submit Form 15G if you take advantage of tax-saving investments and deductions to reduce your net taxable income to below 2.5 Lakhs. You must show these investments in your ITR later.
Here’s an example:
Your total income for the year is 3 Lakhs. You’re withdrawing 1 Lakh from PF before 5 years of service. So your total estimated income on Form 15G will be 4 Lakhs.
If you invest 1.5 Lakhs in tax saving options like PPF, ELSS, or insurance premiums, your net taxable income becomes:
4 Lakhs (total income) – 1.5 Lakhs (tax-saving investments) = 2.5 Lakhs
In this case, you can submit Form 15G. Write 4 Lakhs as your total income on form 15G., You must file your ITR later, showing these investments to prove your actual taxable income is 2.5 Lakhs.
Remember, you’re responsible for the accuracy of your Form 15G. Make sure you actually make these investments and report them correctly in your ITR to avoid penalties.
So What Should I Write on Form 15G: 4 Lakhs or 2.5 Lakhs in the above Example
On Form 15G, you should write 4 Lakhs as your estimated total income for the year. Here’s why:
- Form 15G asks for your estimated total income before deductions.
- 4 Lakhs represents your actual total income (3 Lakhs salary + 1 Lakh PF withdrawal).
- Don’t subtract your tax-saving investments on this form.
What to Do if Your Income + EPF Exceeds 2.5 Lakhs
Form 15G should not be submitted by EPF members if their total taxable income and PF withdrawal amount exceed 2.5 Lakhs, even with tax exemptions.
In that case, you should do:
- Transfer the PF amount to the new company when you join
- Withdraw a partial amount as a PF advance and transfer the remaining amount to the new company.
There is no need to submit Form 15G for PF advance withdrawals.
Recommended:
- How to fill form 15G for PF withdrawal in 2024.
- 13 Most Commonly asked questions related to form 15G and PF withdrawal.
