PF Withdrawal: Step by Step Guide to Withdrawing EPF Money Online
- EPF is a long-term investment vehicle through which employees can secure their retirement
- Each month, the employee and the employer invest 12% of the employee’s base salary in the PF account
- If an individual withdraws PF after 5 years of continuous service, there is no tax impact
New Delhi: The Employee Provident Fund (EPF) is a compulsory savings and retirement scheme for employees. According to EPFO, the employee must contribute 12 per cent of his base salary to this fund each month. The employer will also pay the same amount each month.
The funds in the PF account gradually earn interest on an annual basis. This amount can be withdrawn partially or totally depending on a few conditions that must be met. These can be professional or circumstantial situations.
PF withdrawal rules:
The amount of the PF account can be totally or partially withdrawn under certain conditions. To fully withdraw this amount, the person must be either retired or unemployed for more than two months. Under these conditions only, the amount can be withdrawn in full subject to a certificate from an official office.
According to EPFO, individuals can withdraw the balance from the contingency fund in the event of child marriage, higher education, mortgage repayment, emerging medical conditions, home renovation, purchase or construction. of a house, purchase of land and at a certain age before retirement.
Rules for partial withdrawal from the Provident Fund (FP):
- Unemployment: According to the latest EPF rules, a person is allowed to withdraw up to 75 percent of the total EPF balance if they are unemployed for one month after leaving their job. The remaining 25 percent of the PEF balance can be withdrawn if the person remains unemployed for more than two months.
- Retirement: After reaching the age of 54 and within one year of retirement / retirement pension (whichever comes first), a person is entitled to withdraw up to 90 percent of the balance of the provident fund.
- Marriage / child rearing: If there is a monetary requirement for the purpose of marriage or post-registration education of the children, you can withdraw up to 50 percent of the wage share with interest only after 7 years.
- Disabled: In the case of disabled people, the EPFO ââorganization authorizes a partial deduction from the EPF balance for the purchase of equipment that minimizes the hardship due to the disability. Under it, a person can withdraw six months of base salary and cost allowance (DA) or a salary share with interest or equipment cost, whichever is less.
- Diseases: A person can request a partial withdrawal of the EPF balance for the treatment of an illness in certain cases. For self-use or for the treatment of family members, EPFO ââallows a person to withdraw 6 months of base salary and DA or salary share with interest, whichever is less.
- Loan repayment: For mortgage loan IME repayment, a person is eligible to withdraw the 36 month base salary and DA or total from employee and employer with interest or the total of principal and unpaid interest, whichever is less, only after completing the 10-year membership period.
- Land / house purchase: A person is only allowed to make a premature partial withdrawal from the EPF account for the purchase of land or a house after having completed five years as a member of EPFO. For the purpose of buying a house / apartment / building a house, including acquiring a site, an individual is allowed to withdraw the total from the employee and from the employer with interest or total cost or 24 months of base salary and DA (for the purchase of site) / 36 months of base salary and DA (for the purchase of a house / an apartment / construction), whichever is lower.
- Home renovation: Interestingly, EPFO ââalso has a partial premature opt-out provision for addition / modification / improvement in the home owned by the member / spouse / jointly with a spouse. Under this, a person can withdraw the 12 month base salary and the DA or the employee’s share with interest or cost, whichever is less. This facility can be used twice, the first time after five years of completion of the house and, for the second time, after 10 years after the balance is withdrawn for the first time.
PF withdrawal online:
Step 1: Activate the Universal Account Number (UAN) and make sure it is linked to a registered mobile number. Make sure it is appreciated with your KYC i.e. your bank details, Aadhaar and IFSC code.
2nd step: Go to the UAN portal and log in with your UAN and password. Enter the captcha and proceed to login.
Step 3: Go to the âOnline Servicesâ tab at the top, drop-down menu and click on the âComplaint (Form-31, 19 and 10C)â option.
Step 4: This will take you to a new page with all member details, KYC details etc. Fill in your bank account number and click on “Verify”. Then you must fill in the reason for your departure from FP services.
Step 5: A pop-up window will appear named âCertificate of Commitmentâ. Click on ‘Yes’.
Step 6: Go to the drop-down menu again and select the option “I want to apply” and from there choose the option “Only PF withdrawal (Form 19)”.
Step 7: Complete the “Full Address” section and upload scanned copies of your passbook or check.
Step 8: Select the check mark option on the disclaimer and click on the “Get Aadhaar OTP” option. From there, complete the OTP received on your registered and linked mobile number. After that, submit the request.
Step 9: After submitting this form, follow the same steps and submit âForm 10Câ through the portal. The amount you requested should be deposited into your registered bank account within 15-20 days.
Withdrawal of the EPF before five years of continuous service is taxable. In the event of withdrawal from the EPF after 5 years of continuous service, the amount withdrawn (both principal and interest) is exempt from tax. However, the withdrawal made before 5 years is tax free in these situations:
- Withdrawal made due to the ill health of the employee or the cessation of activity of the employer
- Withdrawals made for any other reason beyond the employer’s control are also tax exempt.
- Income tax is not applicable on advances paid under the EPF scheme.
- In cases of withdrawal where the amount is less than Rs 50,000 or the employer closing the business, the TDS is not withdrawn.
- If the amount is more than Rs 50,000 and the period of service is less than five years, the subscriber can submit form 15G / 15H to avoid TDS in cases where the income for that year is less than the taxable limit
Note that the EPFO ââalso allows the partial withdrawal of the member’s account to deal with financial emergencies resulting from the Covid-19 crisis. Members can withdraw an amount equal to three months Basic and Expense Allowance (AD) or 75% of the account credit balance, whichever is lower.