As the coronavirus pandemic spread in the world people are facing financial difficulty in their life’s. By keeping this in mind Employees’ Provident Fund Organization (EPFO) has revised several of its rules regarding withdrawal from the Provident Fund (PF) account in 2021.
According to new rules, PF account holders can withdraw money equivalent to
- Three months of their basic salary plus dearness allowance or
- 75% of the net balance in their PF or EPF account, whichever is lower.
This will be taken as a non-refundable deposit.
2. Procedure for EPF withdrawal
Broadly, the withdrawal of EPF can be made either by submitting:
- Physical application
- Online application
2.1. Physical Application
- Offline claims can take up to 20 days for settlement.
- For applying physically download the new Composite Claim Form (Aadhaar)/Composite Claim Form (Non-Aadhaar) to withdraw EPF balance.
- To withdraw your PF, you can visit the respective EPFO office and submit a duly filled Composite Claim Form. There are two types of Composite Claim Form- Aadhaar and Non-Aadhaar. The Aadhaar Form does not require any attestation from the employer whereas if you are using the Non-Aadhaar Form, you will have to get the same attested by your employer before submitting to the jurisdictional EPFO office.
2.2. Online Application
Online claims are stipulated to be settled within 3 working days.
To apply for the withdrawal of EPF online through the EPF portal, make sure that the following conditions are met:
- The Universal Account Number (UAN) is activated, and the mobile number used for activating the UAN is in working condition.
- The UAN is linked with your KYC, i.e. Aadhaar, PAN, and the bank details along with the IFSC code.
If the above conditions are met, then there is no need for the previous employer to attest your withdrawal application.
Steps to apply for EPF withdrawal online in UAN Portal
Step 1: Visit the UAN portal.
Step 2: Choose the “For Employees” option under the “Our Services” tab.
Step 3: On the new webpage click on the “Member UAN/Online Service (OCS/OTCP)” option under the “Services” tab of the “For Employees” page.
Step 4: This will redirect you to a new webpage. Log in to the portal using your UAN, password, and the Captcha code.
Step 5: Click on the “KYC” option under the “Manage” tab.
Step 6: You will be redirected to a new webpage. Scroll down to the bottom of the page to find the “Digitally Approved KYC” section and check your KYC details. Ensure the details are correct.
Step 7: Click on the “Online Service” tab from the top menu to proceed with the withdrawal if all the KYC details are correct.
Step 8: Click on the “CLAIM (FORM-31, 19 & 10C)” option from the drop down menu.
Step 9: You will be redirected to a new webpage with an automatically generated “ONLINE CLAIM (FORM 31, 19 & 10C)” form.
Step 10: You will be required to enter the Last 4 digits of your registered bank account number and verify the same.
Step 11: After the verification of the bank account, a “Certificate of Undertaking” will be generated. Click “Yes” on the certificate pop-up to proceed.
Step 12: Click on the “Proceed for Online Claim” option when prompted.
Step 13: For online fund withdrawal, select the “PF ADVANCE (FORM – 31)” option from the drop-down menu provided next to the “I want to apply for” option.
Step 14: A reason for claim has to be selected from the drop-down options provided next to the “Purpose for which advance is required” option. The fields provided for the address of the employee and the amount for advance is also required to be filled up.
Step 15: Click on the checkbox at the end of the page and submit your withdrawal application.
Step 16: You might be required to upload certain scanned documents (depends on the nature of withdrawal).
Step 17: Once the employer approves the withdrawal request, the withdrawal amount will be withdrawn from the EPF account and will be deposited to the respective bank account. Once the claim has been settled, you will receive an SMS notification on your registered mobile number.
3. When can EPF be withdrawn?
3.1. Complete Withdrawal
EPF can be completely withdrawn under any of the following circumstances:
- When an individual retires
- When an individual remains unemployed for more than two months. To make a withdrawal on this circumstance, the individuals must get an attestation of the same from a gazetted office.
Individuals are not allowed to make a complete withdrawal of EPF balance while switching employers if they don’t remain unemployed for two months or more (i.e. the interim period between changing jobs).
Also read: Universal Account Number (UAN)
3.2. Partial Withdrawal
Partial withdrawal of EPF balance can be made only under certain circumstances. These are:
Particulars of reasons for withdrawal
Limit for withdrawal
No. of years of service required
Six times the monthly basic salary or the total employee’s share plus interest, whichever is lower
Medical treatment of self, spouse, children, or parents
Up to 50% of employee’s share of contribution to EPF
For the marriage of self, son/daughter, and brother/sister
Up to 50% of employee’s share of contribution to EPF
Either for account holder’s education or child’s education (post matriculation)
Purchase of land or purchase/construction of a house
For land – Up to 24 times of monthly basic salary plus dearness allowance For house – Up to 36 times of monthly basic salary plus dearness allowance,Above limits are restricted to the total cost
i. The asset, i.e. land or the house should be in the name of the employee or jointly with the spouse.
ii. It can be withdrawn just once for this purpose during the entire service.
iii. The construction should begin within 6 months and must be completed within 12 months from the last withdrawn instalment.
Home loan repayment
Least of below: Up to 36 times of monthly basic salary plus dearness allowanceTotal corpus consisting of employer and employee’s contribution with interest.Total outstanding principal and interest on housing loan
i. The property should be registered in the name of the employee or spouse or jointly with the spouse.
ii. Withdrawal permitted subject to furnishing of requisite documents as stated by the EPFO relating to the housing loan availed.
iii. The accumulation in the member’s PF account (or together with the spouse), including the interest, has to be more than ₹ 20,000.
Least of the below: Up to 12 times the monthly wages and dearness allowance, or Employees contribution with interest, or Total cost
i. The property should be registered in the name of the employee or spouse or jointly held with the spouse.
ii. The facility can be availed twice:
a. After 5 years of the completion of the house
b. After the 10 years of the completion of the house
Partial withdrawal before retirement
Up to 90% of accumulated balance with interest
Once the employee reaches 54 years and withdrawal should be before one year of retirement/superannuation
4. Tax-Free Limit for PF Withdrawals
When you make PF withdrawals, you can enjoy tax exemptions. However, this is applicable only when you make a withdrawal after offering 5 years of continuous service. It is also determined by the tax slab that is applicable to you. If you withdraw your PF balance before the completion of 5 years, then tax deducted at source (TDS) or tax will be applied on your funds.
However, no tax will be levied on EPF withdrawals before 5 years in certain cases depending on the situation. They are:
- When you need to withdraw funds for medical emergencies or health issues that cannot be avoided
- When your full PF amount is lower than ₹ 50,000
- When you withdraw your PF balance with Form 15G or Form 15H (If you submit PAN, then there will be a TDS at 10%)
- When you transfer your PF balance from a PF account to another account
- When the employer’s business is withdrawn