The Employee Provident Fund (EPF) is a retirement benefit given to all salaried employees and the fund is maintained by the Employees Provident Fund Organisation (EPFO) of India. So, any company with over 20 employees is expected as per the law to register with the EPFO. The Employees Provident Fund Organization (EPFO) is under the direct jurisdiction of government and is managed through the Ministry of Labor and Employment.
You need Form no 19 for withdrawal of your EPF and Form no 10C for withdrawal of your EPS. According to old PF laws, you can only opt for entire withdrawal/transfer in case you change your job and get transferred to new employer’s PF account. Entire withdrawal is allowed only if you are unemployed for minimum 2 months.
Note: It has also been proposed that interest-free partial withdrawals may be allowed for the account holders who are unemployed for longer than two months.
Based on the revised PF laws, you can also opt for PF withdrawal if you want to buy a house, repay home loan, require funds for kids’ marriage, kids’ education, and others as specified in the law. For withdrawal procedure, you need to fill up the new composite claim form wherein you need to correctly enter the details of UAN, date of joining/leaving, and purpose of withdrawal.
You need to select one reason, for the withdrawal, from the following:
Remember that if you have just one year left for retirement, you can withdraw 90 percent of your total PF balance and at that time you need not to submit any documents for the same.
For transfers and withdrawal of your EPF, you will need to fill out the required form from the following list of forms, which can be found on the EPFO website:
Recent Update in EPF Withdrawal: On June 26th, 2018 the EPFO made a slight modification to the withdrawal rules. To help those who have lost their jobs, an account holder can now withdraw 75% of the PF funds in his/her account after one month of unemployment. Previously, if an account holder was unemployed for longer than 2 months, he/she could withdraw the entire amount to meet his/her requirements.
The remaining 25% can be withdrawn after two months and the account would be closed. A new account can be opened once the individual starts working again.
There are two options for EPF withdrawal available to the employee –
Offline withdrawal process can be done with or without Aadhaar Card.
Once your employer has verified your Aadhaar card and salary account details and furnished them in the EPFO’s member portal, your UAN should be activated. To withdraw your PF, fill out either form 19, 31 or 10c with your details such as name, PAN, mobile number etc. and attach a cancelled cheque, which the EPFO will verify. Submit the form and cheque to the nearest office. The bank information given should match the one listed in the UAN database.
The process of withdrawing your PF without your Aadhaar card can be a cumbersome process. You must fill out form 19, 31 or 10c and after filling in the required details, get it attested from reliable authority such as a magistrate, manager of the bank of your salary account or a member of the EPFO etc. Make sure the signatory authority stamps every page with his/her signature. You will also need to give your reason for withdrawal to avoid fraudulent withdrawal cases. Attach: indemnity bond with Rs 100 stamp paper, payslips, Form 19, Employee ID card, appointment letter and KYC documents (ID and address proof) to the EPF office.
Note: An EPF account where no contributions (no activity) have been received for 36 or more months continuously is considered as an ‘Inoperative EPF Account. For such users, the EPFO has created a helpdesk on its website to trace their inoperative accounts, which the member can get merged with the present account or withdraw the amount, as may be the case.
EPFO was earlier not paying any interest on this type of account. However, in November 2016, the law was revised, now such accounts are also credited with due interest at the rate of 8.55%.
You can also opt for withdrawing PF online in certain cases.
All registered employees/members can use the online services for pension and PF withdrawals after they satisfy the below requirements.
To withdraw your funds from your EPF account online, simply follow the mentioned steps:
EPFO deducts TDS in cases where withdrawal amount is more than Rs 50,000 or the Employee has not completed the total 5 years of continuous service. The 5 years of service should be continuous employment with same or multiple organizations without any gap and with no withdrawals made by the employee between switching the companies.
However, there are some exceptions to the EPF withdrawal rule as below:
Employee’s Provident Fund enjoys many tax benefits. The investment in EPF depending on the tax slab can provide tax benefit up to 30%. An employee’s contribution to EPF is eligible for tax deduction under section 80C. Respectively, the employer’s contribution to EPF subject to 12% of employee’s basic salary + DA along with Interest is tax exempt. In case any member makes the withdrawal of EPF balance before 5 years, all the tax savings would become Null and Void and he/she must return the exemptions claimed u/s 80C.
If an individual withdraws the funds in his/her EPF account prior to five years, for example after 3 years of contribution, then the exempted taxes will be added back to his/her income for each relevant year and the total taxes found owing shall be payable at the year of withdrawal, even if the individual’s income is below the taxable limit.
It can happen that an employee will switch jobs several times over the course of his/her career lifespan. The procedure to transfer your EPF account to the present employer can now be easily down by following these simple steps:
Kindly click on the relevant banks to know the bank specific procedure of making EPF payment.
Note: Recently ‘Umang’ app was introduced by the IT and Electronics Ministry that has different services in it like Gas booking, Aadhar, NPS along with checking your EPF details.
For employers contributing their portion to an employee’s EPF account, the monthly payments can be easily made by following the below-mentioned steps:
A. Anyone who is part of any covered establishment (where 20 or more persons are employed) on or after 16/11/1995 where the income is less than Rs 6,500 per month as per appointment date.
A. Salary in this context would be BASIC + DEARNESS ALLOWANCE(DA).
A. All companies or organizations that deduct the contribution towards PF from their employees must deposit the amount with their Trust or EPFO. This would be continued as long as the employee is employed at the organization.
A. All members are supposed to nominate an individual for their EPF. Nominees can be family members (spouse or children). There can also be multiple nominees where the percentage share has to be mentioned by the member. In case the member doesn’t have any family members then they can nominate as per his/her choice. Also, where there is no nomination made, the benefit will be paid to dependent parents.
A. The amount would be credited to the member’s bank account directly.
We hope that you found this guide helpful and it answered all the questions you had regarding PF withdrawal and transfer.