Provident Fund is a product which helps salaried people to accumulate funds while they are earning for the period the income flow stops. So generally it is not supposed to be withdrawn before its maturity and jeopardise one’s retirement. However there are circumstances when resorting to the money accumulated in the provident fund account becomes inevitable and thus is allowed by the law to be withdrawn partly or fully. Let us discuss the circumstances in which you are allowed to withdraw the money from your Provident Fund.

Withdrawal from provident fund account In case without employment or non receipt of salary
Withdrawal from provident fund account For purchase of land or construction or purchase of house or repayment of home loan
Withdrawal from provident fund account for illness, education or marriage in the family
Withdrawal from provident fund account– facility within one year before retirement
Earlier one was allowed to withdraw the full balance in provident fund account and close it if remained unemployed continuously for two month and close the account. In order to help one retain the account and meet expenses while remaining unemployed you can now make an application for withdrawal of 75% of balance in the PR account if you are without any employment for more than one month.

Likewise in a similar situation where though one is still in employment but has not received any salary/wages continuously for 2 months for any reason other than a strike, one is allowed to take advances against the balance in PF account. Likewise in case of lockout or closure of the for more than 15 days and the employee does not receive any wages/salary, one can take advance against balance in PF account. While in employment can take advance upto the amount of own contribution and interest accumulated on such contribution. This facility can be availed any time without any requirement of completion of specific period of employment.

Withdrawal from provident fund account For purchase of land or construction or purchase of house or repayment of home loan
Money from PF can be withdrawn for purchase of land for construction of house upto 24 months equivalent of your basic salary and Dearness Allowance (DA). However if you wish to withdraw the month for purchase or construction of a house the eligibility goes upto 36 moths equivalent of salary and D. A. However the withdrawal allowed cannot exceed the employee’s own contribution and interest accumulated on it. The total eligibility in both the cases cannot exceed cost of the land or cost of construction or purchase price of the house. The assets need to be purchased in the name of either the subscriber or spouse of the subscriber or jointly by both.

It is not for buying the land or house that you are allowed to withdraw money from PF but also for repayment of your existing home loan that you can resort to it. You can withdrawn upto 90% of your balance in PF account for repaying your home loan outstanding provided that at least 10 years contributions have been made in the account and there is a minimum balance of Rs. 20000/- in the PF account.

Withdrawal from provident fund account for illness, education or marriage in the family
One can withdraw from PF for the purpose of medical treatment of any member in the family including the subscriber. The withdrawal for this purpose is restricted to an amount equal to the basic salary and DA for 6 months at the time of withdrawals restricted however to aggregate of his own contribution in the PF account. You can avail this withdrawal facility for surgery or treatment of any disease which requires hospitalisation for more than one month. The requirement of hospitalization for more than one month is a condition which is difficult to satisfy these days as there are hardly any treatment which require hospitalisation for 30 days or more.

Likewise you one can withdraw from your PF account for the purpose of marriage of any members in the family like subscriber himself, any siblings and children as well as for meeting the educational expenses for children. The amount which you can withdraw for both the purposes is restricted to 50% of your own contribution with interest accumulated thereon. You can avail this withdrawal facility for both these purposes if you have contributed to the PF for minimum of 7 years on the date of making the application for withdrawal. For the purpose of withdrawing the money for education purpose, certificate from the educational institution where the child is going to pursue the studies is required to be submitted. You can not avail this facility more than three time during currency of the PF account.

Withdrawal from provident fund account– facility within one year before retirement
The Provident fund rules also allow you to withdraw upto 90% of the accumulated balances in your PF account any time after you have completed 54 years of your age. This facility however can only be exercised within one year before the age of retirement or superannuation stipulated in your organisation. Once you retire from your employment you can withdraw the full balance any time and as much as you want.

10 important things to know about the new EPF Withdrawal Rules 2018

The Employees' Provident Fund Organisation (EPFO) made an amendment to the EPF withdrawal rule in the year 2018. This amendment makes EPF withdrawal easier as the waiting period for withdrawal is shorter now. The EPF account consists of contributions from the employer and employee. However, the money in an EPF account cannot be withdrawn at whim.

Here are 10 important rules about EPF withdrawal:

  1. Money from the EPF account cannot be withdrawn during employment, unlike a bank account. EPF is a long-term retirement savings scheme. The money can be withdrawn only after retirement.
  2. Partial withdrawal from EPF accounts is permitted in the case of an emergency such as medical emergency, house purchase or construction, and higher education. Partial withdrawal is subject to limits depending on the reason. The account holder can request online for partial withdrawal.
  3. Although the EPF corpus can be withdrawn only after retirement, early retirement is not considered until the person reaches 55 years of age. EPFO allows withdrawal of 90% of the EPF corpus 1 year before retirement, provided the person is not less than 54 years old.
  4. The EPF corpus can be withdrawn if a person faces unemployment before retirement due to lock-down or retrenchment.
  5. The EPF subscriber has to declare unemployment in order to withdraw the EPF amount.
  6. As per the new rule, EPFO allows withdrawal of 75% of the EPF corpus after 1 month of unemployment. The remaining 25% can be transferred to a new EPF account after gaining new employment.
  7. As per the old rule, 100% EPF withdrawal is allowed after 2 months of unemployment.
  8. EPF corpus withdrawal is exempted from tax but under certain conditions. Tax exemption on EPF corpus is permitted only if an employee contributes to the EPF account for 5 continuous years. The EPF amount is taxable if there is a break in the contribution to the account for 5 continuous years. In that case, the entire EPF amount will be considered as taxable income for that financial year.
  9. Tax is deducted at source on premature withdrawal of the EPF corpus. However, if the entire amount is less than Rs.50,000, then TDS is not applicable. Keep in mind, if an employee provides PAN with the application, the applicable TDS rate is 10%. Otherwise, it is 30% plus tax. Form 15H/15G is a declaration form, which states that a person's total income is not taxable and thus, TDS is avoidable.
  10. An employee does not have to await approval from the employer for EPF withdrawal anymore. It can be done directly from the EPFO, provided the employee's UAN and Aadhaar are linked, and the employer has approved it. EPF withdrawal status can be checked online.

PF Balance Withdrawal Procedure

With the amendments made by the Employees’ Provident Fund Organization (EPFO), now subscribers to the scheme do not require the attestation of their employer to make a partial or complete withdrawal. All that the subscriber has to ensure is that his/her UAN is seeded with their Aadhaar card details. The EPFO has also rolled out the Composite Claims Form, which can be used to request for a partial or complete withdrawal. Subscribers can carry out the whole process of making a withdrawal online either on the EPFO member portal or on the UAN portal.

 

PF Withdrawal Claim Forms

The PF Withdrawal Claim Forms that need to be submitted to withdraw the provident fund or pension fund vary based on the age, reason for making the claim, and whether or not the employee is still in service. Earlier, Form 19, Form 31 , and Form 10C were used to make withdrawals. But recently, a composite claim form has replaced the above-mentioned forms. The forms that required the UAN details of the employee have now been replaced with a composite claim form that requires the Aadhaar details of the employee.

As mentioned earlier, the claim form that needs to be submitted varies based on certain criteria.

When an employee is still under service:

  • If he/she wishes to take an advance from the PF account, the composite claim form (Aadhar/Non-Aadhar) has to be submitted.
  • If he/she wishes to finance his/her LIC policy through the PF account, Form 14 has to be applied.
  • If he/she has crossed 58 years of age and wishes to claim the pension fund.
  • Form 10D should be applied for a monthly pension if 10 years of eligible service has been completed.
  • The composite claim form (Aadhar/Non-Aadhar) should be submitted if 10 years of eligible service has not been completed.

When an employee switches the job

  • And wishes to transfer the account, Form 13 should be applied.
  • When an employee leaves an establishment and doesn’t join another
  • He/she can make a PF and pension fund claim using the composite claim form (Aadhar/Non-Aadhar).
  • Is above the age of 58, and has completed 10 years of eligible service, he/she can make a PF claim using the composite claim form (Aadhar/Non-Aadhar) and a pension claim using Form 10D.
 

When an employee leaves an establishment due to a physical disability

  • He/she can make a PF claim using composite claim form (Aadhar/Non-Aadhar).
  • He/she can make a pension claim using Form 10D.
  • Is above the age of 58 and has not completed 10 years of eligible service, he/she can make the PF and pension claim using the composite claim form (Aadhar/Non-Aadhar).

When an employee is deceased while in service

  • Before the age of 58 while still in service, the nominee/heir/beneficiary can apply for the PF settlement using Form 20, monthly pension using Form 10D, and EDLI (Employees’ Deposit Linked Insurance) amount using Form 5IF.
  • After the age of 58 and had completed 10 years of eligible service, the nominee/heir/beneficiary can claim the PF using Form 20, the pension using Form 10D, and the EDLI amount using Form 5IF.
  • After the age of 58 and had not completed 10 years of eligible service, the nominee/heir/beneficiary can make the PF settlement using Form 20, withdraw the pension using the composite claim form (Aadhar/Non-Aadhar), and claim the EDLI amount using Form 5IF.
 

When an employee is deceased

  • Before the age of 58, the nominee/heir/beneficiary may claim the PF amount through Form 20, and pension amount through Form 10D.
  • After the age of 58 and had completed 10 years of eligible service, the nominee/heir/beneficiary can claim the PF amount using Form 20, and the pension amount using Form 10D.
  • After the age of 58 and had not completed 10 years of eligible service at the age of 58, the nominee, heir or beneficiary can apply for a final PF settlement using Form 20 and for the pension fund using the composite claim form (Aadhar/Non-Aadhar).

Reasons for PF withdrawal:

Subscribers can make a complete or partial withdrawal under the following circumstances:

  • If the member has reached the age of retirement.
  • If he/she needs to fund their house construction or pay their home loan.
  • To cover medical expenses.
  • To cover wedding or education expenses.
  • If they have been unemployed for a duration of more than 60 days or two months.
  • If they wish to move permanently abroad.
  • If a female employee is resigning due to reasons such as pregnancy, childbirth, getting married, etc.

Limits of EPF Partial Withdrawal:

Employees can make withdrawals based on the below listed circumstances. Listed below is the withdrawal purpose, the minimum service requirement to be eligible to make the withdrawal, the PF withdrawal limit and the relations for who the employee can make the withdrawal.

PF withdrawal reason Minimum service PF Withdrawal Limit Relations
House Construction or purchase of plot 3 years 90% of PF balance The PF account holder and spouse or joint
Home Loan Repayment 3 years 90% of PF balance The PF account holder and spouse or joint
House renovation or alteration 5 years from completion of house 12 times of the basic salary or employee share with interest (whichever is lower) The PF account holder and spouse or joint
Marriage 7 years 50% of PF balance The PF account holder, siblings and children
Medical treatment Not required 6 times of his or her monthly salary or total corpus (whichever is lower) The PF account holder, parents, spouse or children.

Requirements for PF Withdrawal:

To ensure the process of making a withdrawal is seamless, subscribers have to meet the below listed requirements if they wish to carry out a withdrawal without the attestation of their employer.

  • Subscribers have to ensure that their UAN is active and their mobile number is seeded with their PF account.
  • The PF member should also seed his/her Aadhaar card details with their PF account.
  • The member’s bank account details and the bank’s IFSC code has to be integrated as well.
  • For final settlements prior to completion of 5 years in the EPF scheme, the member will be required to seed his/her PAN details.

    Check out for more about PF Withdrawal Guidelines

 

Apply EPF Balance Withdrawal Online(EPFO Portal)

Employees can make a PF withdrawal claim on the EPFO member portal by following the steps mentioned below. As already mentioned, if the employee has seeded his/her Aadhaar card details with one’s UAN account, they do not require the attestation of their employer to make a PF withdrawal.

  • Visit the EPFO member portal.
  • Login using your UAN and password, or registered mobile number, or Aadhaar card details, etc.
  • Choose the “for employees” tab.
  • Click on the “manage” tab and check your KYC details to ensure they are correct.
  • Click on the “Online service” tab to proceed with the withdrawal if all the KYC details are correct.
  • Choose “claim” from the drop down menu.
  • Select the “proceed for claim” tab on the claim screen that includes one’s KYC and PF details.
  • On the “I want to apply for” option, choose the type of withdrawal you wish to make -final settlement, partial withdrawal, pension withdrawal, etc.
  • Once you select the type of claim you wish to make, fill in the composite claims form and authenticate using your Aadhaar card details.
  • Enter the OTP sent to your registered mobile number.
  • Once your claim for a withdrawal or final settlement has been made, you can check your claim status by clicking on the “track claim” tab.

Tax Free Limit for PF Withdrawals

In the case of partial withdrawals before completion of 5 continuous years towards the scheme, the employee will be taxed (TDS) 30% of the principal amount and the interest accrued if he/she has not submitted their PAN to the EPFO authorities. If the employee has submitted his/her PAN details to the EPFO authorities, 10% TDS (tax deducted from source) will be applicable. That said, if the total PF corpus is less than 30,000 when the employee is making the withdrawal, no tax will be applicable. In addition, no tax will be applicable if the employee wishes to make a withdrawal to cover medical expenses or if in case the employee was terminated or is unemployed as a result of ill-health, etc., or for transfer of one’s PF account.

An employee can make a tax-free withdrawal in the case of covering medical expenses either for himself/herself, parents, spouse, or children. With regard to withdrawal for medical purposes, employees do not need to serve a certain period in the scheme to avail a tax-free withdrawal. The EPFO also made an amendment to PF withdrawals for medical purposes, following which an employee does not need to submit a medical certificate when making a withdrawal claim for medical reasons. Now, only self-declaration form along with the Composite Claims Form (for partial and complete withdrawals) has to be submitted to make a withdrawal claim for medical purposes.

Online Grievances Portal for PF Withdrawal

The Consumer Protection Act encompasses a detailed procedure to resolve various grievances of EPF account holders. An individual or member can log on to the official website of EPFO and click the tab ‘register grievance’. A member can register all kinds of grievances vis-a-vis withdrawal of EPF account, insurance benefit (payment), scheme certificate, transfer of the account, cheque misplacement and PF balance issuance among others.

PF Withdrawal Online

All cumbersome paperwork related to withdrawal of EPF account may be a thing of the past. EPFO aims to launch an online facility for PF withdrawal in 2016. EPFO, which currently has over five crore members, is planning to settle PF claims in three hours after receipt of a withdrawal application (online application will be transferred to the bank accounts of subscribers). To the end, EPFO has become UIDAI’s registrar. While around 92 lakh subscribers provided their Aadhaar numbers, EPFO verified around 64 lakh numbers so far (as of October 2015) for linking it with UANs.

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