PF WITHDRAWAL
PF WITHDRAWAL
According to the 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. These withdrawal claims can be raised online. Online claims are stipulated to be settled within 3 working days while offline claims can take up to 20 days for settlement.
| Reasons | Eligibility | Withdrawal Limit |
|---|---|---|
|
Housing Loan for construction or addition of house/purchase of site/flat |
Minimum 60 months of service |
Up to of 36 months of his/her basic along with DA/ the total of employee and employer shares with interest/ the total cost of the house |
|
Marriage of self/son/daughter/brother/sister or for post matriculation education of children |
Minimum 84 months of service |
Up to 50% from the EPF account |
|
One year before retirement |
Should be above 54 years of age |
Up to 90% of his/her EPF amount |
|
Medical expenses/Natural Calamity/purchase of equipment by physically handicapped/closure of factory/cut in electricity in establishment |
No minimum service tenure |
Up to 6 months of his/her basic and DA/ the entire contribution |
Types of PF Withdrawals
Subscribers can make three different types of PF withdrawals on the EPFO member portal. They are:
- PF final settlement
- PF partial withdrawal
- Pension withdrawal benefit
Subscribers can make the above-listed withdrawals on the EPFO member portal with the attestation of their employer if they have seeded their Aadhaar card details with their UAN.
PF Withdrawal Rules
In order to ensure that employees continue to be enrolled in the scheme and avoid making withdrawals from their PF corpus and instead save it for the future or for retirement, EPFO has listed a number of PF withdrawal rules. They are as follows.
- All withdrawals made before completion of 5 years of continuous service are subject to tax. Withdrawals after completion of 5 years of continuous service in the EPF are tax-free.
- In case the employee was terminated or is unemployed as a result of ill-health and so on, withdrawals will not attract tax.
- If the employee makes a withdrawal before the completion of 5 continuous years in the scheme, the principal amount as well as the interest accrued, is subject to tax. That said, the amount will be taxable in the current financial year.
- For withdrawals before completion of 5 continuous years towards the scheme, the employee will be taxed 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 at source) will be applicable.
- Funds transferred from one’s PF account towards the National Pension Scheme (NPS) will not attract tax when one makes a withdrawal.
- If the employee shifts 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 have to facilitate the use of the Composite Claims Form to make a partial withdrawal or a final settlement claim.
- If the employee has seeded his/her Aadhaar card details with their UAN, they can submit the Composite Claims Form to make a withdrawal directly to the EPFO without the requirement of the attestation of their employer. Those who have not seeded their Aadhaar card details with their UAN have to submit the Composite Claims Form with the attestation of their employer to make a withdrawal.
PF 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.
Criteria's for PF Withdrawal
- When an employee is still under service
- If he/she wishes to take an advance from the PF account, the composite claim form (Aadhaar/Non-Aadhaar) has to be submitted.
- If he/she wishes to finance his/her LIC policy through the PF account, Form 14 has to be submitted.
- 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 (Aadhaar/Non-Aadhaar) should be submitted if 10 years of eligible service has not been completed.
- When an employee switches the job
- And wishes to transfer EPFaccount, 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 (Aadhaar/Non-Aadhaar) 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 (Aadhaar/Non-Aadhaar).
- 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 (Aadhaar/Non-Aadhaar).
- 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 (Aadhaar/Non-Aadhaar), 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 (Aadhaar/Non-Aadhaar).
Reasons for PF withdrawal
The situations under which you can go ahead and withdraw money from your EPF while you are still working
- Medical Treatment
- Marriage purposes
- Construction of house or purchase of property
- Repaying the existing home loan
- Education purposes
- Alterations or repairs for your house
- Medical Treatment
You can withdraw money from your EPF account to meet the financial requirements of a medical treatment, provided it meets the following conditions:
- Any major surgery in a particular hospital
- The hospitalisation period is more than a month
- The individual is suffering from Tuberculosis, Leprosy, Cancer, Mental Derangement, Paralysis, heart problems, etc. and is on leave that has been granted by the employer for the mentioned illness
You can actually withdraw the money in EPF at any given time during the period of your service. It is not needed that you have a complete a specific number of years in the organisation to claim that money. You can always draw the money for treatment purposes, even if you have completed one or two years in your present organisation.
You must also remember that the maximum amount that can be availed by you is your six months’ salary. This amount may not be very big but still it will offer you some help that you might need in a crisis situation. Not only can this advantage be taken anytime, but also, it can be enjoy as many times as you want. Thus, your PF will save you for sure.
Certain documents must be provided by you along with the Form 31
- Your employer must give a certificate stating the insurance scheme offered by him and the benefits that are not available for the member. If not this, then the member must provide a certificate issued by Employees’ State Insurance Corporation that would state that fact that the member can no longer avail the cash benefits provided by the Employees’ Insurance Scheme
- The doctor must certify that hospitalisation for a period of one month is required in the case. Also, if there is a requirement for surgery, that must also be stated by the doctor in that certificate
- Marriage Purposes
Money from your EPF can be withdrawn for an occasion like marriage in case you have already completed seven years of your service life. You can use up to 50 % of the amount that is there in your EPF account and you can enjoy this advantage for a maximum of three times. So, let us consider that you have around INR 5 lacs in your EPF account. However, you must not calculate the entire amount when you wish to withdraw it for your marriage purposes. Just your own contribution towards EPF along the interest accumulated on it is supposed to be calculated by you. Applicable cases are as follows.
- Your own wedding
- Wedding of your child
- Wedding of your sibling
- Construction of house or purchase of property
You can withdraw some money from the EPF when you are planning to purchase a house or construct a house. However, you must understand a few rules first.
- The land or house that you wish to purchase must be on your name, your spouse’s name or jointly in both your names. Any other combination will not be allowed
- You must have completed a period of 5 years in your service
- The maximum amount that you can avail from your EPF account is 24 times your monthly salary
If the property that you intend to purchase is in question then it should first become free from all related disputes. The property must be a registered one and the proof of the registration must also be provided.
- Repaying the existing home loan
If you have taken a home loan and wish to prepay it then you may withdraw some amount from your EPF. But to avail this benefit you must have completed ten years of your service. However, you can only avail this advantage once in your entire lifetime. Also, you can either use the EPF for purchasing house or property or for repayment of present home loan. You cannot avail money for both of them.
The property for which you are making the payment must be in your name, your spouse’s name or jointly held by both of you. Many people have joint home loans with their siblings or parents. In such cases, you will not be able to avail this particular benefit. An amount equivalent to 36 times your monthly salary can be availed from the EPF for the repayment of the existing home loan.
- Education purposes
Some money from your EPF can be withdrawn for Education purposes. This advantage can be availed only for post matriculation educational expenditures. This means, if you admit your daughter or son to any university or college then you will be able to draw money from the EPF account. You must complete seven years in your service before you can avail this benefit.
- Alteration or Repairs of your house
After several years of staying in a house, you might think that it needs some repairs. Some alterations can also be an option which will make things convenient for you. But this is a costly affair and could very well burn a hole in your pocket. You can avail some money from the EPF for this purpose. But first you need to know some rules.
- You can withdraw and enjoy a maximum of 12 times your monthly salary
- From the date of construction, the house that you wish to repair must be at least five years old
- You must have completed a period of ten years in your service life
- This particular facility can be availed only once in the entire lifetime
- The house that you wish you repair must be under your name, your spouse’s name or jointly under both of your names
PF WITHDRAWAL
Fees Start from
RS. 2000
Payment
