You are ensuring security after retirement is the prime concern of every individual. Employees’ Provident Fund (EPF) and Public Provident Fund (PPF) have become very popular nowadays. People are now investing in schemes that can guarantee them a safe and secure retirement. One can get complete information about EPF and how can you withdraw it online in this article. Analogous to the earlier times, people are now more inclined towards using things online. Today, you have the provision for withdrawing your pension amount online. The entire process has gone online. Read ahead to know more on how can you withdraw EPF online?
What is EPF?
The Employees’ Provident Fund (EPF) is a saving scheme defined under the Employees’ Provident Fund and Miscellaneous Act, 1952. The Central Board of Trustees manages this. These trustees come from three segments: Government, Employers, and Employees.
The Central Board of Trustees backs EPFO or the Employees’ Provident Fund Organization (EPFO). EPFO falls under the jurisdiction of the government and is managed through the Ministry of Labour and Employment.
The EPF scheme promoted savings to be used post-retirement. It is a collection of funds that is contributed by both, the employer and employee, every month. The employer and the employee provide 12% of the employee's salary which is a basic +dearness allowance. These savings also get a fixed interest rate. The EPFO decides this interest rate. The entire amount is tax-free. In simple words, if you take out the EPF, then the entire amount will be tax-free. In case you have added a nominee, then the final amount can also be withdrawn by the nominee or the legal heir of the employee after his/her demise.
Difference between EPF and PPF
At this point, it is essential to comprehend that EPF and PPF are different terms. EPF has a contribution from both the employer and the employee, whereas the employee solely contributes to the PPF.
Employees’ Provident Fund (EPF) Schemes
The EPF scheme is availed by crores of people across the nation and is governed by three Acts:
- EPF Scheme 1952
- Employees’ Pension Scheme, 1995
- Employees’ Deposit Linked Insurance Scheme, 1976
Who are eligible for EPF?
Well, if you are planning to apply for EPF, then you need to fulfill the eligibility parameters; here are the different parameters that you need to check if you wish to apply for the EPF:
- The employee must be an active member of the scheme to avail the benefits of this scheme
- Employees of a company are eligible to get PF, insure and pension benefits, from the day they are on the payroll of the organization.
- Any company having a minimum of 20 employees is liable for EPF.
- The scheme doesn’t work for the residents of Jammu and Kashmir.
How much the employee contributes towards the EPF?
The reason why employee prefers EPF is that both, the employee and the employer contribution towards the EPF. These contributions are done monthly and the interest rate fixed depends on the employee's basic salary along with other dearness allowance.
The employee’s contribution is fixed. It is 12% of the basic pay.
This rate is 10% for the following:
- If the company is having a maximum of 19 employees
- The organization has been declared sick by the BIFR
- The company is offering an annual loss
- Organizations are operating under a wage limit of Rs. 6,500
Employers need to contribute a minimum of 12% of basic + DA (up to a maximum salary of 15,000), although they can choose to contribute more. So, the total amount sums up to 1800 per month.
Why should you go for EPF schemes?
Apart from securing your future and creating an accrued amount which you can avail in times of need, the EPF schemes have various other benefits which are as follows:
- Tax-free- One of the significant advantages of EPF scheme is that the deposits don’t fall in the tax slab, so the accrued amount is completely tax-free making the employee the sole owner of the amount. If an employee withdraws the amount at maturity or after completion of 5 years of availing the scheme, then the amount is entirely tax-free. If the employee withdraws the amount before 5 years, then some tax is levied on it.
- Financial security- As mentioned above, one of the primary reasons why employees are opting for this scheme is that it gives them financial security. Additionally, it also provides a secure future for retired individuals.
- Unseen circumstances: Many a time, a situation arises where you are in urgent need of money; in such cases, this accumulated fund can be put to use. The employee may choose to withdraw the fund based on his/her requirements, however, an important point to note here is that the pre-mature withdraw is allowed only in special cases. In addition to this, if the employee loses their job under some situation, then he/she can use this amount to meet expenses.
- Resignation – If an employee quits the job, he/she can withdraw 75% of this amount within one month of leaving the job, and the remaining 25% can be withdrawn after 2 months.
- Death: In case the employee dies; then the amount is given to the nominee.
- Sudden retrenchment- In case there is unexpected lay-off or retrenchment, then the employee can use this fund to meet various needs until he finds another job.
- Insurance scheme- The EPF scheme has a provision wherein the employers need to make contributions towards the employee’s pension which can be used later.
- Accessible All Over- The employee has a Universal Account Number or UAN which the employee can easily access across the nation using their EPF member portal. They can also transfer their account when they with their jobs.
How to Withdraw PF Amount easily?
As mentioned above, the EPF scheme was developed by EPFO to enable the employees to get a substantial amount after their retirement, or in case there is a sudden need of money. It is a kind of retirement fund created for the employees. The scheme was established under the Employees’ Provident Fund and Miscellaneous Provisions Act in 1952.
Initially, the EPF was limited to industrial workers, but later, it was extended to all the salaried employees. Any organization having 20 or more employees must register for EPF and make monthly contributions towards it.
As you already know that the purpose of EPF is to provide financial aid after retirement, the funds should be ideally withdrawn at that time. But, if a situation arises when you want to withdraw it before time, then there is a provision. However, you must know here that the entire amount can be withdrawn before retirement under a particular condition.
Why should you not withdraw EPF earlier?
Although the EPF scheme gives you the provision to withdraw the PF earlier, it is always advisable not to withdraw the PF before maturity. The employee earns an excellent interest rate of 8.65% p.a. This interest earned on the EPF account is tax-free if you withdraw the amount after 5 years of opening the PF account. However, if you remove it before five years, then this amount is taxable. Hence, withdrawing PF earlier is not a good idea.
If you plan to change the job, then you should transfer the account rather than withdrawing it. There are various other reasons why you should not withdraw the PF:
- This will foster the habit of long-term saving and prevents you from being spend-thrift.
- If you remove the PF within five years of opening the EPF account, then the amount will be taxable. If you withdraw it after five years, then this amount is tax-free under section 80C of Income Tax Act.
- If you are switching the job, then you need to transfer your EPF account. You can transfer your PF account to your new company.
- The monthly contribution of the employee and the employer is 12% of the basic salary plus the dearness allowance.
When would you not be allowed to withdraw PF?
Although, there is a lot of flexibility with EPF, there are certain conditions where withdrawal becomes difficult. Here are two situations, where PF withdrawal will become difficult:
- Situation 1: A had left his job five years back, but did not withdraw the PF, however, now he has decided to do so, but the company has shut down. He doesn’t know how to withdraw the PF.
- Situation 2: A had left the job and submitted the PF documents to the previous employer, but the employer didn’t consider the requirement. Now how will A get his PF amount?
These are just some of the situations that may arise where PF withdrawal becomes difficult as the procedure for the same is known to all.
Ways to Withdraw PF Amount
As you already know that you cannot withdraw PF while you are employed, there are certain conditions which make you eligible to withdraw the PF amount. You can do so if you are switching the job and you don’t want to transfer the PF account. In this situation, you will get the leverage to withdraw the amount.
How can you do so?
- You can do so by filing Form 19.
- This form is available with the employer, or you can download it from the EPFO website.
- Fill the form and submit it.
- After successful completion of the PF form to the regional EPF office, the PF amount plus the interest is received by the applicant within three months from the date of application submission.
Apply for PF amount through UAN:
- The application for PF withdrawal has become very easy after the introduction of UAN.
- With the UAN, you can directly apply for PF withdrawal.
- You don’t need the approval letter from the previous employer.
- You simply have to register at the EPF member portal using your UAN and activate your account
- Complete your KYC online by submitting your PAN, Aadhaar and bank account details
- The current or previous employer has to validate your KYC documents
- Once approved and validated, the employee can apply for EPF withdrawal online through the EPF member portal
2. Submitting the form to the regional PF Office
- You can also go the conventional way where you can fill the PF form and submit it to the regional PF office.
- You need to attest the identity before submitting the form.
- Any of the following authorities can do the attestation:
Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public
What are the various conditions under which you can withdraw the PF?
One can easily withdraw the PF under the following conditions:
- You are unemployed for 60 days
EPFO allows partial withdrawal of PF amount under the following conditions:
- Buying a new house
- New house construction
- Purchase of land
- Home renovation
- Repayment of home loans
- 12 months before retirement
If an employee is willing to withdraw partial PF, then he/she needs to complete a certain number of years of service with the current employer. Apart from the service year, it is important to note that there is a limited amount which an employee can withdraw.
Reason for Withdrawal of PF
Number of Service Years
Up to 50% of employee’s contribution to the EPF
Up to 50% of employee’s contribution to the EPF
Purchase of land or property ( this is further subdivided into buying land and buying a house, in both these cases the amount for withdrawal varies)
If you are buying land then up to 24 times of monthly wages +dearness allowance
If you are buying a house- then up to 36 times of the monthly wages +dearness allowance
Repayment of Home Loan
Maximum of 90% from employer and employee’s contribution to the EPF.
12 times of the monthly wages
Just before retirement
Up to 90% of the accrued balance along with the interest rate
Once the employee reaches 57 years
How to file the withdrawal claim?
The process of PF withdrawal begins with a form of submission; this can be done:
- Submitting the form online
- Submitting the physical for in the PF office
Submitting the physical form in the PF Office
- You can claim for PF withdrawal by submitting a physical form.
- You can download this form from the EPFO website.
- Print it and fill the form. Submit this form to the respective EPF office for withdrawal.
- In case you choose the Non-Aadhaar Composite Claim Form.
- Then you need to get those form attested by the employer before you submit the form in the EPF office.
Online PF Form Submission
The PF system has been simplified for the employees and the retiring professionals. They can easily choose the option of online submission and enjoy hassle-free PF approval. To go ahead with this, you can file the withdrawal claim using UAN on the EPFO portal. Make sure that the UAN is activated and the bank details along with KYC are also updated on the system.
You can find the UAN on the salary slip, or you can ask our employer to provide you the UAN number.
More often than not, the subscriber's UAN is provided by their employer and is printed on the salary slip. In case you don’t get the UAN, you can find out the UAN by using the following steps:
- Go to the EPFO website
- Then click on the ‘Know Your UAN Status’ tab
- Fill the details that are required on the form
- Next, you need to enter the authorization PIN which you will receive via SMS on your registered mobile number. So, keep the mobile phone handy.
- Once you receive the UAN, you must also activate this account. The following steps will help you in activating the UAN account.
Steps to activate UAN Account:
- Go to www.epfindia.gov.in and click on the “For Employees” Tab
- Then go to Our Services tab
- In this section, you will find the “Member UAN/Online Services.’
- After selecting this tab, you will be redirected to the UAN portal where you will be asked to activate your UAN account
- Click on the Activate UAN tab.
- You will get a confirmation regarding the activation of your UAN account.
- You will also get a password to access the EPF account information via UAN portal.
How to withdraw EPF online?
Here are the steps to withdraw EPF online:
- Step 1: Go to the EPFO member portal.
- Step 2: Enter your UAN, password and captcha to log in to your account.
- Step 3: Once you are logged in, click on ‘Claim (FORM-31, 19, 10C & 10D)’ from the drop-down menu of ‘Online Service’ tab.
- Step 4: A new tab will open. You need to enter the 4 digits of your bank account (seeded with UAN) and click on Verify.
- Step 5: After your bank account details are verified, you need to click Yes to agree to the terms and conditions defined by the EPFO.
- Step 6: Click on ‘Proceed For Online Claim’.
- Step 7: To withdraw your funds online, select PF Advance (Form 31).
- Step 8: You will need to select the reason for withdrawing from your PF account from the drop-down menu. You will be able to select only those options for which you are eligible. Rest options will be highlighted in red.
- Step 9: Type your complete address. For advance claim, you will need to mention the amount you want to claim. You will also need to upload the scanned copy of cheque/ passbook.
- Step 10: Select the terms & conditions and click on ‘Get Aadhaar OTP’.
- Step 11: You will receive a one-time password on your mobile number linked to Aadhaar. Enter the OTP in the required box.
Once your OTP is accepted successfully, then your application for withdrawal of PF will be submitted. Once the claim is processed, the amount will be credited to your bank account. You can expect the money in your bank account within 15-20 days.
Can I withdraw PF without the employer’s signature?
Yes, there is a provision which allows you to do so. In case you have left your job on a bad note, but want to withdraw PF and wondering how to get your employer signature you can do by using EPFO’s member portal and the UAN. These ways have not only simplified the task of withdrawing PF but at the same time, you can also get the entire process done in lesser time.
Ways of withdrawing PF without employer’s signature:
There are two ways in which you can withdraw the PF:
- With Aadhaar Card
- Without Aadhaar Card
With Aadhaar Card: If you link your Aadhaar card with your EPF account, then there is no need for an employer’s signature.
The Aadhaar card and salary bank account should have been verified by your employer though, and the details embedded in the EPFO’s member portal. Make sure that you activate your UAN account. You need to download Form 19, Form 31 and Form 10C.
Without an Aadhaar Card:
Well, it is mandatory now to have Aadhaar card, but in case you don’t have it and want to withdraw PF, then you need to follow these steps:
- Download Form 19, Form 31 and Form 10C from the EPFO’s member portal.
- Fill all the details and get it attested by the Gazetted officer (the authorities are specified earlier).
- Ensure that all the pages of the form are stamped and have verified bank details.
- To avoid fraud, you need to state the reason for the direct application for withdrawal. Otherwise, it might be considered as a case of fraud. You can mention ‘Non-cooperation’ from the ex-employer is a good choice here.
- Attach an indemnity bond with a Rs 100 stamp paper.
- Also attach copies of appointment letter, Form 19, payslips and employee ID card.
- In the end, you need to attach a copy of your KYC documents before finally submitting the form at the EPF office.
Key points to note before applying for PF withdrawal
- You don’t need employer attestation if your PF account is linked to the Aadhaar
- You can download UMANG app which allows you easy access to PF withdrawal
- You can also update your details in UAN from the member’s portal
- You can also update the nomination details using the member's portal
- TDS is applicable in the following conditions :
- If the employee has not completed 5 years of the service period
- The withdrawal amount should not be more than Rs. 50,000
- At the time of withdrawal, if the total income is less than 2.5 lakhs, then you can submit Form 15G to avoid TDS.
How to check PF Balance-
There are various ways via which you can check the PF balance:
- Umang App – It gives you easy access to your PF account, where you can trace all the activities related to your PF account.
- Missed call- The registered members on the UAN portal can get all the information by giving a missed call on 011-22901406. But make sure that you call from your registered mobile number.
- EPFO Portal- Yes, now you can check and manage your passbook online. Go to the EPFO portal and follow these steps :
- Go to www.epfindia.gov.in
- Click on 'Our Services' and then choose 'For Employees' tab
- You will see Our members followed by passbook
- Click on this tab and you will have passbook in front of you
You can click on https://passbook.epfindia.gov.in/MemberPassBook/Login.jsp to access the account. But make sure that you have activated your UAN number before this.
Conclusion - PF withdrawal has now become very easy, but it is always advisable not to withdraw it at an earlier stage as it may not be beneficial. Choose this option only when there is a necessity or emergency. The points mentioned above will guide you to the entire process of PF withdrawal.