The Provident Fund (PF) is a government-managed retirement savings scheme for employees in India. A key component of India’s social security system, PF was introduced in 1952 with the enactment of the Employees’ Provident Funds and Miscellaneous Provisions Act (EPF and MP Act) by the Employees’ Provident Fund Organisation (EPFO) under the Ministry of Labour and Employment to provide financial security and stability to employees in their retirement years.
Under this scheme, employees contribute a portion of their salary to the PF account, and employers match this contribution. The amount accumulated in the PF account is payable to the employee at the time of retirement or resignation or to their family in the event of the employee’s death.
Employees’ Provident Fund (EPF), also referred to as PF (Provident Fund), is a mandatory savings cum retirement scheme for employees of an eligible organisation. The employees can fall back on the corpus of this fund post-retirement.
As per the EPF rules, the employees must contribute 12% of their basic pay every month to this fund. The employer contributes a matching amount to the employee’s PF account. The amount deposited in EPF accounts earns interest on an annual
When Can You Withdraw EPF?
Complete Withdrawal
EPF can be withdrawn entirely only under the following two circumstances:
- When an individual retires
- When an individual is unemployed for more than one month, he/she can withdraw 75% of the total accumulated amount and can withdraw the rest 25% if the unemployment period stretches beyond two months.
Individuals cannot 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).
Partial Withdrawal
Partial withdrawal of EPF balance can be made only under certain circumstances. The limit of withdrawal is also different for different circumstances. They are explained in the below table:
| Sl. No. | Particulars of reasons for withdrawal | Limit for withdrawal | No. of years of service required | Other conditions |
|---|---|---|---|---|
| 1 | Medical purposes | Six times the monthly basic salary or the total employee’s share plus interest, whichever is lower | No criteria | Medical treatment of self, spouse, children, or parents |
| 2 | Marriage | Up to 50% of employee’s share of contribution to EPF | 7 years | For the marriage of self, son/daughter, and brother/sister |
| 3 | Education | Up to 50% of employee’s share of contribution to EPF | 7 years | Either for account holder’s education or child’s education (post matriculation) |
| 4 | 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 | 5 years | 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. |
| 5 | Home loan repayment | Least of below:
| 10 years | 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 Rs 20,000. |
| 6 | House renovation | Least of the below: Up to 12 times the monthly wages and dearness allowance, or Employees contribution with interest, or Total cost | 5 years | 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 |
| 7 | Partial withdrawal before retirement | Up to 90% of accumulated balance with interest | Once the employee reaches 54 years and withdrawal should be within one year of retirement/superannuation |
Eligibility Conditions for EPF Withdrawal
- The total amount from the EPF account can be withdrawn only after retirement. EPFO considers early retirement only after the person has crossed 55 years of age
- Partial withdrawal of EPF is permitted only in the case of a medical emergency, house purchase or construction, or higher education. The EPF Composite Claim Form has now replaced EPF withdrawal Form 31 which was earlier used for partial withdrawals.
- EPFO allows withdrawal of 90% of the amount 1 year before retirement
- One can withdraw the EPF corpus if he/she faces unemployment before retirement due to lock-down or retrenchment
- As per the new rule, only 75% of the corpus can be withdrawn after 1 month of unemployment. The remaining will be transferred to the new EPF account after gaining employment
- Employees do not need to wait for approval from their employer for withdrawing their EPF. By linking UAN and Aadhar to your EPF account, they can get approval online
- While making the EPF claim online, you must have-
- An active UAN number
- Bank details linked with UAN
- PAN and Aadhar details seeded into EPF database
How To Withdraw PF Amount?
Broadly, the withdrawal of EPF can be made either by submitting:
- Physical application
- Online application
Physical Application
Download the new Composite Claim Form (Aadhaar)/Composite Claim Form (non-Aadhaar) to withdraw the EPF balance.
Composite Claim Form (Aadhaar)
- Use the Composite Claim Form (Aadhaar) if you have seeded your Aadhaar and bank details on the UAN portal and if your UAN is activated.
- Fill and submit the form to the respective jurisdictional EPFO office without the attestation of the employer.
Composite Claim Form (Non-Aadhaar)
- You can use the Composite Claim Form (Non-Aadhaar) if the Aadhaar and bank details are not seeded on the UAN portal.
- Fill and submit the form with the employer’s attestation to the respective jurisdictional EPFO office.
One may also note that in case of partial withdrawal of EPF amount by an employee for various circumstances as discussed in the above table, the requirement to furnish various certificates has been alleviated, and the option of self-certification has been introduced for the EPF subscribers. (For details, you can refer to order dated 20.02.2017 of the EPFO)
Online Application
The EPFO has come up with an online withdrawal facility, which has made the entire process more comfortable and less time-consuming.
Prerequisites
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, bank details, and the IFSC code.
Steps to Apply For EPF Withdrawal Online on UAN Portal
Step 1: Visit the UAN portal.
Step 2: Log in with your UAN and password. Enter the captcha and click on the ‘Sign In’ button.
Step 3: Click on the ‘Manage’ tab and select ‘KYC’ to check whether your KYC details such as Aadhaar, PAN and bank details are verified or not.
Step 4: Once the KYC details are verified, go to the ‘Online Services’ tab and select the option ‘Claim (Form-31,19,10C&10D)’ from the drop-down menu.
Step 5: The following screen will display the member details, KYC details and other service details. Enter your bank account number and click on ‘Verify’.
Step 6: Click on ‘Yes’ to sign the certificate of the undertaking and then proceed.
Step 7: Now, click on ‘Proceed for Online Claim’.
Step 8: In the claim form, select the claim you require, i.e. full EPF settlement, EPF part withdrawal (loan/advance) or pension withdrawal, under the tab ‘I Want To Apply For’. If the member is not eligible for any of the services like PF withdrawal or pension withdrawal due to the service criteria, that option will not be shown in the drop-down menu.
Step 9: Then, select ‘PF Advance (Form 31)’ to withdraw your fund. Further, provide the purpose of such advance, the amount required and the employee’s address.
Step 10: Click on the certificate and submit your application. You may be asked to submit scanned documents for the purpose you have filled the form.
Documents Required for EPF Withdrawal
- Universal Account Number (UAN)
- Bank account information of the EPF subscriber
- Identity and address proof
- Cancelled cheque with IFSC code and account number
EPF Withdrawal Taxability
EPF withdrawal is tax-free when an employee has contributed to the EPF account for five consecutive years. If there is a break in five years’ contributions, the EPF withdrawal amount becomes taxable for that financial year.
TDS is deducted if an employee withdraws EPF amount before five years and the amount is above Rs. 50,000. The TDS is deducted as follows:
- TDS of 10% will be deducted on EPF withdrawal for employees withdrawing more than Rs. 50,000 before completing five years and producing their PAN card.
- When such employees do not produce their PAN cards, a TDS of 30% will be deducted from the amount withdrawn.
- However, no TDS will be deducted if the employee furnishes Form 15G/15H. You can download Form 15G from the EPFO portal or the website of major banks.
- No TDS is deducted when an employee withdraws EPF amount after completion of 5 years of continued service, irrespective of the withdrawal amount.
FAQs
What are the requirements for EPF withdrawal for home loan repayment?
The primary requirement for the member to withdraw EPF for home loan repayment is that the member should have completed three years of continuous service. Also, the maximum amount that can be withdrawn for the purpose is 90% of the EPF corpus.
Can I claim EPF without logging in to the EPF portal?
You can fill EPF withdrawal form offline if you do not wish to use the online platform. In case you want to use the online method, you will have to log in to the EPF member portal using your UAN and password.