Employees’ Provident Fund (EPF) is the retirement tool for many employees. Here’s how you can withdraw money from it prematurely or at the time of retirement
The Employees’ Provident Fund (EPF) is a compulsory savings and retirement fund for eligible employees.
The Employees Provident Fund Organisation (EPFO) has fixed the interest rate at 8.15% for the financial year 2022-23. There was a hike in the EPF account interest rate by 0.05%. The interest rate for the EPF account was 8.10% for FY 2021-22.
Under EPF regulations, employees must contribute 12% of their basic salary to this fund each month. Employers contribute a matching amount to their employees’ PF accounts.
The funds deposited in the EPF accounts earn interest yearly.
After retiring, employees can withdraw the total amount accumulated in their EPF account. Under certain circumstances, employees can also make premature withdrawals from their EPF account. Let’s discuss them in detail.
Criteria for PF Withdrawal
Unemployment: If an individual has been unemployed for over a month, he/she can withdraw up to 75% of the total accumulated amount. If the unemployment period stretches over two months, the remaining 25% can also be withdrawn.
Education: PF account holders can withdraw up to 50% of their total contribution to the EPF to pay for their higher education or their children’s education costs after class 10. However, this withdrawal can be made only after contributing a minimum of seven years towards the EPF account.
Marriage: An account holder can withdraw up to 50% of the employee’s share to pay for necessary expenses for his/her marriage, or the marriage of the account holder’s son, daughter, brother, or sister. However, this provision is applicable only after completing seven years of PF contribution.
Specially-abled individuals: Specially-abled account holders can withdraw 6 months of basic wage along with a dearness allowance or employee share with interest (whichever is less) to pay for the equipment cost. This facility has been introduced to ease the financial burden of purchasing expensive equipment.
Medical emergencies: An EPF account holder can withdraw the balance to pay for urgent medical treatments for certain diseases for self or immediate family members. The withdrawal amount is limited to six months of basic wage and dearness allowance or the employee share along with interest, whichever is less.
Existing debts: Individuals can withdraw 36 months of basic wage + dearness allowance or the total of employee and employer share along with interest to pay their home loan EMIs. This facility is available only after a minimum of 10 years of contribution towards the EPF account.
Purchase residential property or land plots: The PF withdrawal rules allow the account holder to make a premature withdrawal to purchase empty land or prefabricated houses.
EPF Withdrawal Rules 2023
Here is the list of basic rules of EPF withdrawal:
- Under the new regulations, PF account holders can withdraw money equivalent to three months of their basic salary plus dearness allowance or 75% of the net balance in their EPF account, whichever is lower.
- Till the time you are employed, you cannot take out any money from your PF account, be it fully or partially.
- If you don’t have a job for at least a month, you can withdraw up to 75% of your funds. You can withdraw the remaining balance if you are unemployed for two months or longer.
- These withdrawal requests can be submitted online and will be processed within three working days. Offline claims, on the other hand, can take up to 20 days to process
How to Apply for EPF Withdrawal
The withdrawal of EPF balance can be made by submitting a physical or online application.
Physical Application
Download the new Composite Claim Form (Aadhaar)/Composite Claim Form (non-Aadhaar) to withdraw the EPF balance.
- Use the Composite Claim Form (Aadhaar) if you have linked your Aadhaar and bank details on the UAN portal and if your UAN is activated. Then you must submit the form to the respective jurisdictional EPFO office without the employer’s attestation.
- Use the (non-Aadhaar) Composite Claim Form if the Aadhaar and bank details are not linked on the UAN portal. Fill and submit the form with the employer’s attestation to the respective jurisdictional EPFO office.
Online Application
The EPFO has an online withdrawal facility which has made the process more comfortable and less time-consuming.
To apply for the withdrawal of EPF online through the EPF portal, some conditions must be 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
- Visit the UAN portal.
- Log in with your UAN and password. Enter the captcha and click on the ‘Sign In’ button.
- Click on the ‘Manage’ tab and select ‘KYC’ to check whether your KYC details, such as Aadhaar, PAN and bank details, are verified.
- 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.
- Enter your bank account number and click on ‘Verify’.
- Sign the certificate of the undertaking and then proceed.
- Click on ‘Proceed for Online Claim’.
- 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’.
- Select ‘PF Advance (Form 31)’ to withdraw your fund. Provide the purpose of such advance, the amount required, and the employee’s address.
- Submit your application and wait for the employer’s approval. The money will be credited to the bank account within 15–20 days.
- Note that if you meet the above conditions, there is no need for the previous employer to attest your withdrawal application.
Eligibility for EPF Withdrawal
The conditions that must be fulfilled by an employee to be eligible for EPF withdrawal are outlined below:
- Full withdrawal of EPF funds is allowed only after retirement. However, early retirement is considered by the EPFO only after the employee attains the age of 55.
- Partial withdrawal of EPF funds is permitted only for certain purposes such as medical emergencies, home acquisition or construction, or higher education.
- The EPFO allows 90% withdrawal of the entire amount one year before retirement.
- If an employee is laid off or loses their job due to retrenchment, they may withdraw their EPF corpus.
- As per the new regulations, only 75% of the corpus can be withdrawn after one month of unemployment. The remaining funds will be transferred to the new EPF account once the employee secures a new job.
- Employees do not require their employer’s permission to withdraw their EPF. They can obtain permission online by linking their UAN and Aadhaar to their EPF account.
- When making an online claim, employees must ensure that they possess:
- PAN & Aadhaar details
- An active UAN number
- Bank details linked to their UAN
When Can I Withdraw from the EPF Account?
You can make either a partial or complete withdrawal from your EPF account.
You can fully withdraw your EPF balance under certain cases, such as:
1. When you have retired.
2. When you have been unemployed for more than two months. You have to get an attestation from a gazetted officer to make the withdrawal.
Steps to Enter Exit Date
The exit date refers to the date on which you have left your job or employment. It is mandatory to update your exit date on the UAN portal for smooth processing of your withdrawals.
Here are the steps that you can follow to update or enter your exit date.
Step 1: Visit the UAN member portal and Login with your UAN number and password.
Step 2: Click on the “Manage” tab and go to the “Mark Exit” option.
Step 3: Under the ‘Select Employment’ option, tick the company’s name for which you want to mark your exit.
Step 4: After this, it displays your basic details such as DOB, date of joining EPF and EPS. Here, you can update your exit date and select the reason for exit from the given options.
Step 5: Accept the declaration and click “Request OTP.”
EPF Partial Withdrawal
Partial withdrawal from the EPF account can be made under a few circumstances.
Reasons for Withdrawal | Withdrawal Limit | Eligibility/ Minimum Service |
Medical purposes (self, spouse, children, or parents) | 1. Six times the monthly basic salary, or 2. The total employee’s share plus interest. | No criteria |
Marriage (self, child, siblings) | Up to 50% of employee’s share of contribution to EPF | 7 years |
Higher education (self or child) | Up to 50% of employee’s share of contribution to EPF | 7 years |
Construction or purchase of a house/land | Up to 24 times for land & up to 36 times for house of the monthly basic salary + dearness allowance. | 5 years |
Home loan repayment | 90% of PF accumulations | 10 years |
House renovation | Up to 12 times the monthly wage | 5 years |
Partial withdrawal before retirement | Up to 90% of the total accumulated balance, given the employee is above 54 years of age | 1 year before retirement |
EPF Withdrawal Taxability
EPF corpus withdrawal is tax-free, but only if certain conditions are met. To qualify for tax exemption, an employee must contribute to the EPF account for five consecutive years. If there is a break in contributions for five years, the EPF amount becomes taxable for that financial year.
If an employee withdraws their EPF corpus prematurely, tax is deducted at source. However, no TDS is deducted, if the amount is less than Rs 50,000. For withdrawals more than that, it is compulsory to furnish a PAN card.
If the employee is not liable to pay taxes even after the additional withdrawal amount, they can give Form 15G/15H along with their PAN number, and TDS won’t be charged. However, if an employee falls in the tax bracket, they can’t give Form 15G/15H. Since PAN is necessary, 10% TDS will be charged.
If an employee doesn’t provide their PAN number to the EPFO and withdraws more than Rs. 50,000, a hefty 34% TDS will be deducted.
Documents Required for EPF Withdrawal
To withdraw from your PF account, the following documents are necessary:
- Universal Account Number (UAN)
- Accurate bank account information
- The bank account should be in the account holder’s name, as funds will not be transferred to a third party unless in case of the account holder’s death.
- The employer should provide the employee’s information to the EPFO and record the employee’s departure from the company, including accurate joining and leaving dates.
- The employee’s personal information, such as date of birth and father’s name, must match the identity proof.
EPF Withdrawal Claim Form
Different types of forms are required for different purposes under the Employees’ Provident Fund (EPF) scheme. The specific EPF form required would vary depending on the purpose.
Form | Purpose |
Form 10C | For claiming the scheme certificate or withdrawal of pension |
Form 10D | For pension claims after retirement |
Form 11 | Automatic transfer of EPF |
Form 14 | For financing a LIC policy from the PF account |
Form 15G | To save TDS for any interest generated from EPF |
Form 19 | Settlement of EPF |
Form 2 | Nomination for the EPF and Employees’ Pension Scheme |
Form 20 | For claiming PF by the nominee in case of the employee’s death |
Form 31 | Withdrawal of EPF |
Form 5 | Registration form for new employees for EPS and EPF |
Form 5(IF) | For claiming assured benefits of employees’ deposit-linked insurance |
Expert Introduction
As an expert in finance and retirement planning, I have extensive knowledge and experience in the field of retirement funds, including the Employees' Provident Fund (EPF). I have worked with numerous individuals and organizations to help them understand the intricacies of retirement planning, including the rules and regulations surrounding EPF withdrawals and contributions. My expertise is grounded in practical experience and a deep understanding of the financial and regulatory aspects of retirement funds.
Employees’ Provident Fund (EPF)
Overview of EPF
The Employees’ Provident Fund (EPF) is a compulsory savings and retirement fund for eligible employees. It requires both employees and employers to contribute 12% of the employee's basic salary to the fund each month. The EPF accounts earn interest yearly, and the interest rate for the financial year 2022-23 was fixed at 8.15%, with a 0.05% hike from the previous year.
Premature Withdrawal and Retirement
Employees can withdraw the total amount accumulated in their EPF account after retiring. However, under certain circumstances, they can also make premature withdrawals. These circumstances include unemployment, education expenses, marriage, medical emergencies, existing debts, and the purchase of residential property or land plots.
Criteria for PF Withdrawal
The criteria for PF withdrawal cover various situations, such as unemployment, education, marriage, specially-abled individuals, medical emergencies, existing debts, and property purchase. Each criterion has specific conditions and withdrawal limits based on the employee's contributions and the duration of their EPF account.
EPF Withdrawal Rules 2023
Under the new regulations, PF account holders can withdraw money equivalent to three months of their basic salary plus dearness allowance or 75% of the net balance in their EPF account, whichever is lower. Additionally, specific rules apply to withdrawal during unemployment, with the possibility of withdrawing up to 75% of the funds after one month of unemployment and the remaining balance after two months.
How to Apply for EPF Withdrawal
EPF withdrawal can be made through a physical or online application. The process for both methods involves specific forms and requirements. The online application requires the Universal Account Number (UAN) to be activated and linked with the employee's KYC details, such as Aadhaar, PAN, bank details, and the IFSC code.
Eligibility for EPF Withdrawal
Full withdrawal of EPF funds is allowed only after retirement, with early retirement considered by the EPFO only after the employee attains the age of 55. Partial withdrawal is permitted for specific purposes such as medical emergencies, home acquisition or construction, or higher education. The EPFO also allows 90% withdrawal of the entire amount one year before retirement.
EPF Withdrawal Taxability
EPF corpus withdrawal is tax-free if certain conditions are met. However, premature withdrawals may be subject to tax deductions at source, depending on the amount and the individual's tax status. Form 15G/15H can be submitted to prevent TDS deductions under certain circumstances.
Documents Required for EPF Withdrawal
To withdraw from the PF account, the necessary documents include the Universal Account Number (UAN), accurate bank account information, employer-provided employee information, and EPF withdrawal claim forms, depending on the purpose of withdrawal.
EPF Partial Withdrawal
Partial withdrawal from the EPF account can be made under specific circumstances, such as medical purposes, marriage, higher education, home-related expenses, and house renovation. Each reason for withdrawal has its eligibility criteria and withdrawal limits based on the employee's contributions and service duration.
Steps to Enter Exit Date
Updating the exit date on the UAN portal is essential for the smooth processing of EPF withdrawals. The process involves logging into the UAN member portal, selecting the employment, updating the exit date, and selecting the reason for exit from the given options.
This comprehensive overview of EPF and its withdrawal processes provides a clear understanding of the rules, eligibility, tax implications, and necessary documentation for individuals seeking to make withdrawals from their EPF accounts.
If you have any further questions or need additional information, feel free to ask!