Introduction: 

Employees’ Provident Fund (EPF), commonly referred to as PF (Provident Fund), acts as a compulsory savings and retirement scheme for employees of eligible organizations After retirement, employees can rely on the cumulative corpus of this bank as financial results.

As per EPF rules, employees are required to contribute 12% of their basic salary to this fund every month, employers match this contribution to employees’ PF account and the amount deposited in EPF account earns interest every year.

EPF Withdrawal:

The Employees’ Provident Fund (EPF), commonly known as EPF, stands as a prevalent retirement savings scheme for Indian employees, whether by mandate or choice. Administered by the Employees Provident Fund Organisation (EPFO), a statutory entity, it consistently revises its withdrawal regulations to enhance the convenience of its extensive subscriber base, exceeding millions. Generally, online EPF withdrawal may require up to 3 business days, while the offline method may extend to 20 working days. 

Employees can only access this amount upon retirement, they retain the option to withdraw a portion of their EPF corpus in emergencies, subject to specific conditions. This blog comprehensively covers when EPF withdrawals are permissible, the withdrawal process, and more!

Reasons for PF Withdrawal:

• You are eligible for PF withdrawal after fulfilling certain conditions. Below are several reasons why you can withdraw money from your PF account:
• A PF account holder can withdraw 50% of his total contribution to his Employees Provident Fund, which is only employee share. This money can be used to pay for your children’s education after class 10, as well as your own higher education.
• You have the right to withdraw an amount equal to 12 times your monthly salary from your EPF to pay off your ongoing home loan. However, eligibility requires at least five years of continuous service.
• You can use the withdrawal to pay off your existing home loan or to buy property or a house. To qualify for the loan, you must register the property in your name, your spouse’s name, or both. Otherwise this benefit is not accessible .
• You can withdraw this money at any time in your career, without having to complete a specific period of service with your current organization. The amount of withdrawal allowed is equivalent to six months’ salary and can be used for medical treatment of yourself or family members
• You have the right to withdraw money from your EPF account for necessary expenses related to your marriage, your child’s marriage, or your brother’s marriage. However, at least seven years of continuous service is required to qualify for this benefit. You can withdraw up to 50% of the amount invested in your EPF account, plus accumulated interest, and this amount can be used up to three times
• Under the 2023 PF Withdrawal Rules, disabled individuals are eligible to withdraw an amount equivalent to six months’ basic pay and dearness allowance, or a portion of the employee’s contribution with interest, whichever is lower, to cover the cost of their equipment .

Conditions for EPF Withdrawal:

• Since the main objective of the Employees Provident Fund is to build a retirement corpus for employees, the right time to withdraw the EPF is after retirement. Well, here are some basic rules you need to know:
• You are unable to withdraw your PF funds, either fully or partially, until the duration of your employment.
• If you want to withdraw ₹50,000 or more from your corpus within five years of opening your EPF account, a TDS of 10% (if you have a valid PAN card in India) or 30% (if not available) will be charged ) with PAN card).
• You can use the loan to protect your PF savings, depending on your continuity of service for a certain period of time.
• You can withdraw your entire PF balance if you have been unemployed for at least two months, or the joining date for your new job is more than two months from the last working day in your previous organisation .

Types of PF Withdrawal:

There are three types of PF withdrawals that can be processed on the EPFO ​​member portal:

Complete Withdrawal:

This mode of PF payment continues after reaching retirement age and completion of service period. If the account holder dies, the nominee would get the money.

Partial Withdrawal:

This payment withdrawal occurs when you withdraw only a portion of the PF corpus to meet your financial needs.

Pension Withdrawal Benefits:

If you provide continuous service to the organization for 10 years, you become eligible to receive pension benefits upon retirement.

The withdrawal types mentioned above can be processed through the EPFO member portal, requiring attestation from their employer.

Process to Withdraw EPF:

You have the option to either follow the online process or the offline process to withdraw your EPF. Both methods are explained below:

Online:

Before proceeding with the EPF withdrawal process, ensure that your UAN is activated and linked with your KYC details (Aadhaar and PAN Card). Once confirmed, follow the steps below to withdraw your EPF online:

• Login to  UAN member portal using your credentials
• Select “Online services” from the top menu bar.
• Select the option “Claim” (Form-31, 19 & 10C) from the drop down menu.
• The next screen that opens will display all the member information
• Enter the last 4 digits of your bank account number on this screen and click on ‘Verify’.
• Sign the Certificate of Undertaking by clicking on ‘Yes’ to proceed with the steps.
• Select ‘PF Advance (Form 31)’ option now to withdraw your money online.
• This action will prompt a new section of the form, where you’ll be asked to select the ‘Purpose for which withdrawal advance is required’.
• In the same section of the form, you will need to enter the withdrawal amount along with the employee’s address.
• After entering the details, make sure to tick the validation box and submit your EPF withdrawal.
• It’s important to note that depending on the purpose of your withdrawal, you may also be required to submit specific scanned documents.
• Once you have completed the entire process, you will need to contact your employer for approval of your EPF withdrawal.
• The EPFO ​​will send an SMS to the registered mobile number regarding your withdrawal request. Once your order is processed, the requested amount will be transferred to your bank account. It usually takes about 15-20 business days for funds to be transferred to an employee’s account.

Offline:

• If you’re not comfortable using the internet or online portals, you can always opt to withdraw your EPF through offline methods. Simply visit the relevant EPFO ​​office and submit the duly completed Comprehensive Claim Form.
• It’s essential to note that there are two types of Composite Claim Forms: Aadhaar and Non-Aadhaar.. The former does not require any proof from the employer while the latter requires a proof of your employer’s application before submitting it to the Judicial Regional EPFO ​​office.

Eligibility Conditions:

• An employee has to fulfill the following conditions to be eligible for EPF withdrawal.
• The total corpus accumulated in the EPF account can only be withdrawn upon the employee’s retirement.
• Employees can withdraw up to 90% of their EPF corpus within one year of their retirement.
• The new rules established by the EPFO also stipulate that only 75% of the total EPF corpus can be withdrawn after one month of unemployment, with the remaining amount being transferred to the new EPF account upon gaining employment.
• Employees linking their UAN and Aadhaar to their EPF account can  seek approval for EPF withdrawal from their employers online
• Employees must ensure that their active UAN, bank details linked with their active UAN, and details of their Aadhaar and PAN are correctly seeded into the EPF database.

Documents Required for Withdrawal:

The following documents must be provided at the time of EPF withdrawal:

• Identity Proof
• Address Proof
• Cancelled cheque
•  IFSC code 
• Account number
• Father’s Name
• Date of birth

Taxation Rules :

• Though a portion of an employee’s salary to EPF is tax-free, there are specific rules governing taxation of EPF corpus withdrawn before retirement The following table for tax purposes provide details of rules relating to EPF exclusion.
• If more than Rs. 50,000 is withdrawn before completing 5 years of continuous service, a 10% tax deduction at source applies if PAN is provided; otherwise, 30% TDS plus tax will be applicable. Providing Form 15G/15H exempts TDS deduction.
• EPF withdrawals after completion of 5 years of continuous service are not subject to TDS.
• The tax liability for the employee upon EPF withdrawal is determined by their salary in the year of withdrawal.
• If the employee claims exemption from EPF contribution in the years prior to the exemption as per Section 80C, the employee’s contribution, employer’s contribution and interest on any savings will be taxed in full.

Conclusion: 

Although the primary purpose of accumulating funds in the EPF account is to build a retirement corpus, members are permitted to withdraw a portion of the accumulated corpus before reaching retirement age. While an offline EPF withdrawal process exists, members can conveniently withdraw EPF online through a hassle-free process. Online EPF withdrawal requests can typically be settled within 15 to 20 working days from the date of submission.