PF Withdrawal Guide
From June to August 2020, the Government of India will pay the employer and employee contributions to employees’ EPF accounts for extra three months. The incentive is available to businesses with up to 100 employees and 90% of those employees earning less than Rs 15,000 per month. Non-government organizations’ EPF contributions have been lowered from 12 percent to 10%. EPF (Employees’ Provident Fund), sometimes known as PF (Provident Fund), is a mandated saving and retirement plan for eligible employees of a company. This fund is meant to serve as a savings account for employees when they retire. Employees are required to contribute 12% of their base income to the EPF every month. The employer contributes an equal amount as well. The money you put into an EPF account earns interest every year. Once an employee retires, they can withdraw the total amount accumulated in their EPF. Premature withdrawals are possible if specific circumstances are met.
It’s worth noting that the Employees’ Provident Fund Organization has made the use of UANs, or Universal Account Numbers, mandatory for all employees covered by the PF Act. The employee’s EPF account would be connected to the UAN. The UAN is transferable throughout an employee’s career, and there is no need to file for EPF transfer while changing employers.
PF Withdrawal Process Online
1. When is EPF able to be withdrawn?
It is possible to withdraw EPF completely or partially. Under any of the following circumstances, the EPF can be withdrawn:
PF Withdrawal Completely
Under any of the following circumstances, EPF can be totally withdrawn:
- When a person decides to retire
- When a person has been out of work for more than two months. Applicants must obtain an attestation from a gazetted office to make a withdrawal in this situation.
The entire withdrawal of EPF benefits while changing employers without becoming unemployed for two months or more (i.e., during the transition period between jobs) is prohibited by PF laws and regulations.
Partial PF Withdrawal
Partially withdrawing EPF funds is possible under specific circumstances and subject to certain requirements, which are briefly explained below:
|Reasons for withdrawal||Withdrawal Limits||Required No. of years of service||Various other conditions|
|Medical purposes||whichever is less, six times the monthly basic salary or the whole employee’s share plus interest||No criteria||Medical treatment of self, children, spouse, or parents|
|Education||Employees can contribute up to 50% of their salary to the EPF||7 years||Either for account holder’s education or child’s education (post matriculation)|
|Marriage||Employees can contribute up to 50% of their salary to the EPF.||7 years||For the marriage of self, brother/sister, and son/daughter|
|Home loan repayment||The least of the following: Up to 36 times the basic monthly pay + the dearness allowance. The total corpus is made up of the contributions of both the employer and the employee, plus interest. The total amount owed on a home loan in terms of principal and interest||10 years>||The property must be registered in the employee’s or spouse’s name, or jointly with his or her spouse’s name. Withdrawal is permitted subject to the submission of the required documentation as specified by the EPFO for the housing loan taken out. The total amount in the member’s PF account (or jointly with the spouse) must be more than Rs 20,000, including interest.|
|Purchase of land or purchase/construction of a house||For land, up to 24 times the monthly basic pay plus a dearness allowance is available. For a house, you can borrow up to 36 times your monthly basic salary + dearness allowance; however, you can only borrow up to the whole cost of the house.||5 years||The asset, such as land or a house, should be in the employee’s name or jointly with his or her spouse’s name. During the entire service, it can only be withdrawn once for this purpose. Construction must begin within 6 months of the last withdrawal installment and be completed within 12 months.|
|House renovation||The least of the following: Employees contribution with interest, or Total cost, up to 12 times the monthly wage and dearness allowance||5 years||The property should be registered in the employee’s or spouse’s name or held jointly with the spouse. The service can be used twice: After 5 years from the house’s completion b. After 10 years from the house’s completion|
|Partial withdrawal before retirement||Interest on up to 90% of the accumulated balance||When an employee reaches the age of 54, he or she must withdraw within one year of retirement or superannuation.|
2.PF Withdrawal Procedures
EPF withdrawals can be made in a variety of ways, including:
- Physically submitting a withdrawal application
- An online application must be submitted
Physically submitting a withdrawal application
The new composite claim (Aadhaar)/composite claim form (Non-Aadhaar) can be downloaded here:
The new composite claim form (Aadhaar) can be filled out and submitted to the appropriate jurisdictional EPFO office without the employer’s attestation, while the new composite claim form (non-Aadhaar) must be filled out and submitted to the appropriate jurisdictional EPFO office with the employer’s attestation.
It’s also worth noting that, in the case of a partial withdrawal of EPF funds by an employee for the reasons listed in the table above, the obligation to provide various certificates has recently been removed, and EPF subscribers now have the option of self-certification.
An online application must be submitted
Surprisingly, the EPFO has just lately introduced an online withdrawal service, which has made the entire process more convenient and less time-consuming.
Make sure the following conditions are met before applying for an EPF withdrawal online using the EPF portal:
- The UAN (Universal Account Number) has been activated, and the phone number used to activate it is operational.
- The UAN is linked to your KYC, which includes Aadhaar, PAN, and bank account information, as well as the IFSC code.
If the conditions listed above are completed, the prior employer’s attestation is not required to complete the withdrawal process.
Steps for EPF Withdrawal Process Online
To apply for an EPF withdrawal online, follow these steps:
- Go to the UAN portal
- Enter the captcha after logging in with your UAN and password.
- Next, go to the Manage page and select KYC to see if your KYC information, such as Aadhaar, PAN, and bank account information, is right and verified.
- After you’ve validated your KYC information, go to the tab “Online Services” and pick “Claim (Form-31, 19 & 10C)” from the drop-down menu.
- The ‘Claim’ screen will show the member information, KYC information, and other service information. Click on ‘Verify‘ after entering the last four numbers of your bank account.
- To sign the undertaking certificate, select “Yes” and then “Continue.”
- Select ‘Proceed for Online Claim’ from the drop-down menu.
- Under the tab ‘I Want To Apply For’ on the claim form, select the claim you desire, i.e. full EPF settlement, EPF portion withdrawal (loan/advance), or pension withdrawal. Due to service requirements, if the member is not eligible for any of the services, such as PF withdrawal or pension withdrawal, that choice will not appear in the drop-down menu.
- To withdraw your funds, select ‘PF Advance (Form 31).’ Include the reason for the advance, the amount required, and the employee’s address.
- Submit your application by clicking on the certificate. To fill out the form, you may be asked to supply scanned documents. Only until your employer has approved the withdrawal request will you receive money in your bank account. The money is normally credited to the bank account within 15-20 days.
Steps to Apply for Home Loan Based on EPF Accumulation
One can apply for a home loan using your EPF account balance by following the steps below:
- Apply for a house loan to the EPF Commissioner in the format prescribed in Annexure 1 through the housing society.
- The Commissioner will issue a certificate detailing your EPF account contributions for the previous three months. Alternatively, you can bring a printed copy of your EPF passbook to show the contribution for the previous three months.
- You have the option of receiving a lump-sum payment or payments.
- The EPFO makes a direct payment to the housing society.
FAQs (Frequently Asked Questions)
Are contributions to the EPF tax deductible?
Yes, under Section 80C of the Income Tax Act of 1961, EPF contributions are tax-deductible.
Will my employer contribute more if I do?
No, regardless of whether you choose VPF or not, the employer’s contribution will stay at the basic minimum.
Do I need authorization from my employer to withdraw EPF from EPF?
As a result of the latest modifications, the employer’s authorization is no longer required to make EPF withdrawals.
Is it possible for me to increase my EPF contributions?
Yes, you can increase your EPF contributions and put up to 100% of your basic income into the fund. This is referred to as VPF.
Can I make withdrawals before the end of the month?
Yes, you are authorized to make premature withdrawals if specific requirements are met, and you must provide documentary evidence for the same.