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What is EPF?
Employees’ Provident Fund or EPF is a compulsory savings scheme as per the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 initiated by the Government of India (GOI). This investment provision is executed and managed through the Employees’ Provident Fund Organisation (EPFO) as a part of the Ministry of Labour & Employment. EPFO members receiving contribution to the fund are eligible to avail EPF withdrawal online when qualifying for defined pre-requisites.
This scheme is compulsory for companies with 20 or more employees unless specific exemptions are applicable to such organisations. It is substantiated by a compulsory contribution of 12% of the basic salary of employees in their EPF account, an equal amount of which is deposited by the employer every month. Such calculation also takes into account the dearness allowance and retaining allowance towards the deposit amount. For companies with less than 20 employees, deposit amount accounts for 10% of an employee’s salary in his/her EPF account.
The primary aim of this scheme is to deliver a lump sum to salaried individuals to finance their post-retirement funding needs. Contributions to the EPF scheme are thus compulsory for individuals earning less than Rs.15,000. Individuals drawing a higher salary can, however, subscribe to this investment scheme voluntarily.
Individuals fulfilling certain criteria laid down by the EPFO are eligible to collect the corpus using the EPFO portal withdrawal facilities. Employees have to use their Universal Account Number (UAN) generated during membership registration to avail this corpus.
How to Apply for EPF Withdrawal Online?
Individuals can benefit from the convenience of online PF withdrawal process. Employees should, however, ensure that their contact number used to activate UAN is operational. Besides, KYC verification and linking of the bank account via IFSC code should also be completed for each UAN for the application to proceed.
Consider following the steps mentioned below for EPF withdrawal online –
Step 1: Visit the official portal of EPFO.
Step 2: Use UAN and password to login to an EPF account. Enter captcha to authenticate the login.
Step 3: Select the ‘Manage’ tab to access available options.
Step 4: Choose ‘KYC’ to determine whether the details provided via the KYC documents are authentic and accurate.
Step 4: Select the ‘Online Services’ tab.
Step 5: Choose ‘Claim (Form 31, 19 & 10C)’.
Step 6: Verify the details displayed on the current page. These include KYC information and additional service details.
Step 7: Input the last four digits of the registered bank account and click on ‘Verify’.
Step 8: Select ‘Yes’ for your online certificate of undertaking stating that EPF claim amount will be credited to the bank account mentioned.
Step 9: Click on ‘Proceed for Online Claim’.
Step 10: Under the ‘I Want to Apply For’ option, select Full EPF Settlement, or EPF Part Withdrawal, or Pension Withdrawal as required.
Step 11: Choose the correct purpose under ‘Purpose for which advance is required’ option.
Step 12: Enter the amount of advance required.
Step 13: Upload scanned documents required for approval. The employer is also required to approve this request for withdrawal to complete.
Step 14: The EPF withdrawal amount is expected to be credited to an applicant’s bank account within 15-20 days from the date of application.
EPF withdrawal through app
Employees availing EPF withdrawal online also have an option to use Unified Mobile APP for New Governance (UMANG) for a convenient withdrawal process on their mobile phones. The simplified online application process along with services offered by UMANG are meant to make the EPF withdrawal online an easily accessible option for individuals who require additional funds to finance specific requirements recognised by the EPFO.
Individuals can, however, file for an EPF withdrawal offline by printing out a composite claim form and providing the following details. Also, self-attested documents along with the employer’s approval attestation need to be submitted to the regional EPFO commissioner.
Circumstances for EPF Withdrawal
Individuals are required to fulfil a handful of eligibility criteria to avail part withdrawal and final settlement on their EPF account.
The table mentioned below specifies the conditions for withdrawal of specific amounts from EPF accounts along with their corresponding forms to be submitted to avail this facility.
|Eligible Conditions||Forms Required|
Additionally, individuals who have been unemployed for 2 months can claim 75% of their deposits in the form of non-refundable advances using Form 31, only on the condition that their unemployment is certified by a gazetted officer of the Government of India. Employees who have subscribed to the Voluntary Retirement Scheme (VR) at 55 years of age are eligible for EPF withdrawal online as a full and final settlement by submitting Form 19.
EPFO now issues composite claim forms for Aadhaar and non-Aadhaar members, which combines Form 19 for PF final settlement, Form 10C for pension withdrawal benefits, and Form 31 for PF non-refundable advance. Individuals can only avail these forms for EPF withdrawal online if they have provided complete details in Form 11, Aadhaar number, bank account information along with an activated UAN.
Purposes to Withdraw Funds from EPF Accounts
Individuals who have availed composite claim forms have an advantage of submission of these forms to regional EPFO commissioners through self-attestation. The application regarding online EPF withdrawal in India for final PF settlement, pension withdrawal benefits, and partial withdrawal of PF amount is valid if individuals require them for a specific purpose stated in the composite forms.
Employees who need to withdraw a percentage of their PF corpus have to provide details such as their name in block letters, UAN, 12-digit Aadhaar number, date of joining the organisation, along with their choice of purpose from the list stated in this form. Withdrawal can thus be made for the following purposes.
- Home or land purchase – For individuals employed in a company for a minimum span of 5 years are eligible to withdraw between 24 times and 36 times of their monthly salary to finance the purchase of land or purchase/construction of a house.
- Home loan repayment – Individuals can also withdraw 90% of the funds in their EPF account for home loan repayment in case they have been in service with an organisation for a minimum of 3 years.
- Marriage – Individuals who have worked with an employer for 7 years or more can withdraw up to 50% of their contribution to the corpus, along with accumulated interest to finance their own marriages or that of any other member in their immediate family.
- Education – Employees have an option to finance the post-matriculation education of self or family members with the EPF corpus. Individuals, however, have to be employed with an organisation for at least 7 years to be able to avail 50% of their EPF deposit besides the interest accrued on their portion.
Individuals with a physical disability can also withdraw a portion of their EPF account fund to finance medical and technical equipment acquisition. In case an individual decides to settle abroad permanently, he/she is eligible for PF withdrawal online.
Other purposes recognised by EPFO for disbursal of the entire amount or a percentage of EPF contribution include termination at an organisation where such member is currently employed and discontinuation of electricity supply in the establishment.
Employees applying for EPF withdrawal online also have to furnish information on the date of leaving service. PAN is only required if an employee’s term of service in an organisation exceeds 5 years.
Documents Required for EPF Withdrawal Online
EPFO stipulates that individuals should possess vital documents before applying for EPF withdrawal online. Employees should arrange 2 revenue stamps, valid bank account statement, Aadhaar Card, PAN Card, Voter ID Card and a cancelled blank cheque.
The bank account number and IFSC code of an individual should be visible on the cancelled check for the successful approval of withdrawal application.
Tax Liabilities on the Withdrawn EPF Amount
The amount withdrawn from an employee’s EPF account is liable for a percentage of tax deduction depending upon the tenure of service of such employee with an employer during the time of such withdrawal. In case an individual is availing withdrawal facilities without completing 5 years of employment with a particular organisation, he/she has to pay a Tax Deducted at Source (TDS) of 10% if PAN is furnished during EPF withdrawal online.
In the absence of PAN, the individual is liable to a TDS of 34.6% on the amount withdrawn. Individuals with less than Rs. 50,000 in their EPF accounts at the time of withdrawal are exempted from TDS liabilities.
Since the withdrawn amount from an EPF account is perceived as income, employees availing such facilities have to mention it by selecting ‘Section 10(12) Recognised Provident Fund’ while filing ITR.
EPF withdrawal online is, therefore, an easy process that simplifies the claims procedure availed by employees. Online withdrawal also contributes to the lesser time required for the claim amount to be transferred to an employee’s bank accounts. Besides the time-saving factor, an individual can also bypass the attestation requirements of employers by using the online method of withdrawal, which makes it a popular mode of EPF withdrawal.
- Is it compulsory for employees to furnish PAN for EPF withdrawal?
Even though the submission of PAN is not compulsory for employees availing EPF withdrawal facilities, they can substantially reduce the burden of Tax Deducted at Source (TDS) on the withdrawn amount.
- Can an employee claim EPF withdrawal without logging in to the EPF portal?
Yes, apart from the option for online PF withdrawal in India, an employee can also withdraw the amount offline by applying with the regional EPFO commissioner.
- Can employees withdraw full PF amount before they retire?
No, employees can access the entire corpus from their EPF account only after retirement. Individuals can, however, withdraw 90% of the funds in their EPF account one year before retirement.