PF or EPF is known as the Employee Provident Fund Scheme where the employee contributes a small portion of his/her remuneration i.e. 12% of the basic pay every month. Also, the employer contributes a matching amount which further contributes to form a corpus. This in particular is used to fund at the time of employee’s retirement. The PF scheme is a savings scheme developed by the Employees’ Provident Fund Organization (EPFO). This retirement fund was created for the salaried employees under the Employees’ Provident Funds and Miscellaneous Provisions Act in 1952.
The Funds accumulated till the time of retirement should be withdrawn at the time of retirement only. It usually becomes a source of Income after retirement. It is important to mention that EPF organization has made the allotment of Universal Account Number (UAN). The Universal Account Number (UAN) is compulsory for all the employees covered under the PF Act. The UAN is linked to the employees EPF and is portable throughout lifetime. Besides, at the time of changing jobs you just need to apply for an EPF transfer.
You can withdraw EPF partially or completely and this amount can be withdrawn under the below circumstances:
When he/she retires from employment
When he/she remains unemployed for a period of 2 months or more.
Note: In case an individual is not employed for more than 2 months, it needs to be mentioned in the reason for withdrawal which has to be certified by a gazetted officer.
At the time of switching from one job to another without remaining unemployed for 2 months or more one just needs to transfer their accumulated EPF Contributions from older account to current account. One can also partly, withdraw the EPF under certain situation that are subject to certain prescribed conditions as described below:
| Sl No | Particulars of reason for withdrawal | Limit for Withdrawal | No of Years of Service Criteria | Other Conditions |
|---|---|---|---|---|
| 1 | Marriage | Employee’s share of up to 50% of contribution to EPF | 7 years | For the purpose of marriage of self, son/daughter, brother/sister |
| 2 | Education | Employee’s share of up to 50% of contribution to EPF | 7 years | For the education of either self or his/her children after class 10 |
| 3 | Purchase of land / purchase or construction of a house | For land – up to 24 times of monthly wages plus Dearness allowance For house – up to 36 times of monthly wages plus Dearness allowance |
5 years | The asset i.e. land or the house should be in the name of the employee or spouse or Jointly. |
| 4 | Home loan repayment | Up to a maximum of 90 %, from both employee’s contribution and employer contribution in Employee Provident Fund. | 10 years | i. The property should be registered in the name of the employee or spouse or jointly ii. Withdrawal permitted subject to furnishing of requisite documents as called for 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 Rs 20,000. |
| 5 | Renovation of house | Up to 12 times of the monthly wages | 5 years | The property should be registered in the name of the employee or spouse or jointly. |
| 6 | A little before retirement | Up to 90% of accumulated balance with interest | Once he reaches 57 years ( as per recent amendment) | For himself |
The EPF withdrawal can be done in two ways i.e.:
By submission of a physical application
By submission of an online application
For physical submission, you need to download new composite claim with Aadhaar / composite claim form without Aadhaar from the official website i.e. Employee’s Provident Fund Organization, India.
The composite claim form with Aadhaar can be submitted and filled without the attestation of the employer to the respective jurisdictional EPFO office.
The composite claim form without Aadhaar, has to be filled with attestation of the employer to the jurisdictional EPFO’s office. However, in case of partial withdrawal under various circumstances as discussed in the above table by an employee very recently, the requirement to furnish various certificates has been done away with, which has the option of self-certification for the EPF holders.
EPFO recently launched the online facility for withdrawal of PF which has made the process less time consuming and hassle-free.
Following are the Prerequisites to apply for withdrawal of EPF online through EPF Portal:
Universal Account Number (UAN) should be activated and the mobile number used for activating the UAN should be in a working condition.
The UAN should be linked with your KYC such as your Aadhaar, bank details and PAN along with the IFSC code.
In case you meet the above conditions, an attestation of the previous employer is required to carry out the withdrawal process.
Visit the Employees Provident Fund Organization (UAN portal) India.
Login with your UAN and password
Click on ‘manage’ tab and select KYC to check if all your details like the PAN, Aadhaar, bank details etc. are verified and are correct.
Once the KYC details are verified, go on the online services tab and select the option ‘Claim’ from the drop-down menu
Post which the Claim, the screen displays the member’s KYC details, member details, and other services.
Now you can click on Proceed For Online Claim and submit your claim form.
In this step, you can select the required claim form like EPF Part withdrawal or pension withdrawal, EPF Settlement which is shown under a tab ‘I Want To Apply For’.
Also, if the member is not eligible because of the service criteria, then that option will not be shown.
The EPFO has listed a number of rules for PF withdrawal which are as follows:
Withdrawals which are made before completion of 5 years of continuous service will be subject to tax. And the ones after the completion of 5 years of continuous service in the EPF will be tax free.
In case the employee was unemployed or terminated due to ill-health and so on, withdrawals will not attract tax.
Tax will not be levied if the funds are getting transferred from one’s PF account towards the National Pension Scheme.
In case the employee has to shift jobs and in the process has different PF account, it will be considered as continuous service to the scheme provided there has been no gap in contributions.
Employees will have to encourage the use of the Composite Claims Form to make final claim or partial withdrawal.
One can withdraw his/her PF for the following reasons:
If an individual has reached the age of retirement
When you need money to pay house loan or a house construction
Cover medical expenses
Female employee resigning due to childbirth, pregnancy or marriage purpose.
If he/she has been unemployed for more than 60 days.
If he/she wishes to move abroad permanently
To cover education or wedding expenses
In case of any grievances with regards to the PF Withdrawal, the Consumer Protection Act has encompassed a detailed procedure to resolve the same. A member can visit the official website of EPFO and click the tab ‘register grievance’. Grievances such as the scheme certificate, transfer of the account, insurance benefit, vis-a-vis withdrawal of EPF account can all be registered here.
What is the contribution for Provident Fund by the Employer and Employee?
The employee has to contribute 12% of his/her basic salary for the contribution of provident fund and the same has to be contributed by the employer.
Is it necessary for all the employees to contribute to the provident fund?
Yes, the employees who draw a basic salary up to Rs. 6,500 (Rs. 15000/- from 01.09.2014) have to contribute to the Provident fund. However, the employees who draw a salary above Rs. 6501/- (Rs. 15001/- from 01.09.2014) can either contribute to the PF or have an option to become a member of provident fund.
Which form can be filled while transferring provident fund deposit?
You can fill form number 13 to transfer your Provident Fund amount.
What are form number 19 & 10C for?
From 10C is for Pension Scheme withdrawal and Form 19 is for Provident Fund withdrawal.
What are the benefits under Employee Provident Fund Scheme?
The benefits provided under employee Provident scheme are as follows:
You get withdrawal benefits and
You get the benefit of non-refundable advances
