EPF withdrawal rules and ways to withdraw PF: Today in this post we are going to tell you about how to withdraw your Provident Fund or what rules are to be followed for withdrawing the Employees Provident Fund. But before we start you should be aware of what exactly EPF is and what is the use of it? So, let’s begin with understanding a bit more about EPF.
EPF is basically termed as Employees Provident Fund. This fund is created for the benefit of the employees. Every month a small portion or amount is deducted from the salaries of the employees and is contributed or deposited in this fund. And at the same time every month the same portion or amount that has been deducted from the employee’s basic salary is contributed by the employer. And this fund is created for the future benefit of the employee or we can say at the time of the retirement he employee can finally use that amount stored in the EPF. EPFO that is the Employee Provident Fund Organization is responsible for handling and managing these funds and it cover almost all the organizations having more than 20 employees.
All the employees under this fund are given a Unique Account Number that is UAN by their employer and is crucial for accessing the Provident Fund Account. Whenever any employee wants to know the balance of her/his provident fund account or want to know any further information about the EPF can login to their respective PF account from the official site of EPFO. And for signing up to the PF account they will require that unique code or UAN.
Now as we have already told you that being an employee you can take the advantage of your provident fund or we can say you can withdraw the balance from the provident fund in the future or after the retirement. But, you can also withdraw the amount from your PF account before the retirement. For availing this facility you will be required to follow some rules and regulations.
Before knowing the rules and regulations for withdrawing the money from the provident fund you should first know about the types of EPF withdrawal. Along with that you should also know about the amount or money to be contributed by both employee and employer. So, just keep on scrolling and know about them!
EPF contributions and types of withdrawals
The contribution of an employer towards the employee provident fund consist of amount equal to the 12% of the basic salary plus dearness allowance plus retaining allowance towards the Provident Fund of an employee. And the same happens with the Employee, they also need to contribute the same portion of money towards EPF. But according to the specified criteria, if an organization has the number of employees less than 20, the contribution will be a bit different from the employee and the employer. In this type of scenario, both the employee and the employer have to contribute 10% instead of 12% for the Provident Fund.
After knowing the amount of contribution that you need to do towards your PF account, you must be aware of the types of PF withdrawal. So, there are three types of EPF withdrawals to withdraw Provident Fund money. They all are as follows:
First is Provident Fund partial settlement –
- This is a type of withdrawal under which you want to withdraw a partial amount and not the complete amount of money from the total EPF. You can make such kind of withdrawal even when you’re still working.
- Second is Provident Fund final settlement –
- Under this, you withdraw all the money that you have in your Provident Fund.
- Thirds is Pension withdrawal benefit –
- After the retirement from the job you receive this kind of benefit. I basically help you in receiving the PF amount as pension every month after your retirement.
- Now you have also understood about the types of withdrawals, it is the time to know the rules and regulations for PF withdrawal.
Latest EPF withdrawal rules
For keeping everything under control and preventing the employees involved in the PF scheme from making unnecessary withdrawals from the provident fund, there are number of PF withdrawal rules which have been stated by the EPFO. Given below are all the new EPF withdraw rules that you need to know:
- According to the recent rules by the EPFO, an employee can withdraw his/her EPF savings if he/she is not working or is unemployed for a span of 2 months.
- If you have contributed to the EPF account for more than five years then at the time of withdrawal you are not required or subjected to the income tax. Bit in case, if you tend to withdraw money from the PF account before 5 years of starting the PF account then you need to pay income tax on the amount you withdraw.
- If you are an employee and you are working with multiple employers and the PF has been transferred to the new employer or we can say to a new company then it will be considered as continuous employment.
- In the scenario if an employee is terminated by the employer because of reasons which are beyond the employee’s control, like issues related to health, then the PF withdrawal is not taxed.
- If you withdraw the PF money before completion of 5 years towards the scheme, then the amount will be taxable for the same financial year.
- Each and every employee must use the Composite Claims Form when she/he needs to make a partial PF withdraw or even a final settlement claim.
- Once your PF is transferred towards the NPS or National Pension Scheme, it will not attract any tax when you withdraw it.
- If an employee while applying for the withdrawal has linked his/her Aadhaar card with the UAN number, then he/she can submit the Composite Claim Form directly to the EPFO. There will be no need for attesting the form from the employer.
EPF withdrawal process
After knowing the EPF withdrawal rules, you might want to know about the ways how you can withdraw PF money. So, here is the complete guide for you
Reasons that can lead to PF withdrawal
As we have told you earlier that an employee can make a partial or complete withdrawal. These can be done under some specific circumstances and those are given below:
- When an employee retires or is at the age of retirement.
- When an employee needs money to fulfill the expenses for his/her wedding or education.
- If an employee needs money for the repayment of a loan or construct a house.
- If any employee wants to go to foreign or abroad permanently.
- Also in case, if an employee has been terminated for the reasons which are beyond the control or wants to leave the job.
Things required for EPF withdrawal
In case you want to make PF withdrawal, then you will be required to do some things that will make the whole process convenient and hassle-free. Here are the things that you need to follow:
- First of all you need to ensure that the UAN is active and is linked to your mobile number.
- And your Aadhaar number is linked to your PF account.
- Your bank account and the IFSC code are too required to be linked to the PF account.
- Also if you want to make final settlements before 5 years of continuation of the scheme, you need to send your PAN details in the PF account.
How to withdraw EPF balance online?
Now let’s talk about the online process of withdrawing the money from the employee provident fund. Given below are the steps you are required to follow:
- Go to the online EPFO portal for the members.
- Now you will have to login to the member portal through your UAN code and the password, or Aadhaar card details, or even by your registered phone number.
- After that find and click on the for employees
- Now select “manage” and check the KYC details that are shown to you.
- Then click on the online services tab to proceed.
- After doing that click on claim.
- Now, select proceed for claim on the screen that has your KYC and PF details.
- After following the above step you’ll see the I want to apply for On the option choose the PF withdrawal type.
- After selecting the type of PF withdrawal you want to make, complete the Composite Claim Form and authenticate it using Aadhaar card details.
- You’ll get an OTP on your registered phone number. Type the OTP in the provided space.
- Once you are done by completing all the processes, you can check the status of your claim by checking the Track claim tab present in the options.
How to withdraw EPF balance through an application?
If you are not comfortable with the online method of withdrawing the PF balance, you can go for an offline way of doing it as well. Just, follow the given steps and you are all done!
- First of all download the new Composite Claim Form from the EPFO website.
- After downloading fill the form manually.
- After filling the form submit it to the nearest EPFO office.
- Keep in mind that there are 2 different Composite Claim Forms available, one for the people who have linked their Aadhaar with their PF account, and the other for people who haven’t.
- In case you haven’t liked your Aadhaar to PF then you have to attest the Composite Claim Form from your employer.
- Submitting the form is the last step of the process.
So, at the end hope we have made you clear with everything. For any kind of feedback, you can leave a comment below or can directly message us.