PF Withdrawal:Rules and Regulations?

Employee’s Provident Fund Scheme/EPFO/PF Withdrawals

Employee’s Provident Fund Scheme is a social security scheme. You contribute towards this scheme during your employment period. You (the employee) contribute at least 12% of your basic salary towards the scheme. Your employer also contributes some amount towards your EPF which combinedly is known as ‘EPF corpus’.

This scheme is managed by the Employee’s Provident Fund Organization (EPFO). EPFO is responsible for online transfers, claims, and withdrawals. Initially, the employees had to undergo the tedious process of withdrawing and transferring PF since the employees received new member IDs with new employment. But with the advent of Universal Account Number (UAN), the process has been simplified to a great extent. UAN acts as an umbrella account to which all your PF accounts can be linked. With this, you can easily file claims for online transfer or PF withdrawal. You can also check for KYC details attached to your account.

PF withdrawals become a necessity when you are planning your retirement or leaving your job and taking a break. You might also need your EPF funds for unavoidable situations. For all these purposes, it is imperative that you know how to withdraw your funds and what are the requirements.

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EPF Withdrawal Rules 2024

The EPF account comprises contributions from both the employer and the employee, but withdrawals are subject to specific rules and cannot be made freely.

Here are the key rules for EPF withdrawal:

• Withdrawal on Retirement: Money in the EPF account can only be fully withdrawn after retirement, not during employment, unlike a bank account.
• Partial Withdrawal: Partial withdrawal is allowed online for emergencies like medical treatment, higher education, or purchasing/construction of a residential house.
• Withdrawal Before Retirement:
  • EPFO permits withdrawal of 90% of the EPF corpus 1 year before retirement if the employee is at least 54 years old.
  • In cases of unemployment due to retrenchment or lockdown, EPF corpus withdrawal is allowed.
• Unemployment Rules:
  • After 1 month of unemployment, 75% of the EPF corpus can be withdrawn, with the remaining 25% transferable to a new EPF account upon re-employment.
  • As per the old rules, 100% EPF withdrawal was permitted after 2 months of unemployment.
• Tax Rules:
  • EPF corpus withdrawal is tax-exempt if the employee contributes continuously for 5 years.
  • Premature withdrawals above ₹50,000 attract TDS: 10% if PAN is provided, and 30% plus tax if PAN is not submitted.
• Checking EPF Status: EPF status can be checked online directly through EPFO if UAN and Aadhaar are linked and approved by the employer.
• Declaration of Unemployment: EPF subscribers must declare unemployment to withdraw funds.

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When Can One Withdraw EPF?

Complete PF Withdrawal

You can withdraw the entire EPF amount only under two conditions:

• Upon attaining 58 years of age, individuals can withdraw their entire provident fund amount with the flexibility to withdraw upto 90% of the amount.
• If you are unemployed for more than one month, you can withdraw 75% of the total accumulated amount. If unemployment continues for more than two months, you can withdraw the remaining 25%.

For complete PF withdrawal while switching employers, individuals need to be unemployed for 2 months or more after leaving their jobs.

Partial PF Withdrawal

You can make partial withdrawals from your EPF balance only under certain conditions. These are explained in the table below:

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Documents Required for PF Withdrawal

Here are the documents required to withdraw the PF amount -

• UAN, or Universal Account Number, is mandatory and can be obtained from the employer.
• Make sure your bank details match the EPF account’s registered name.
• The bank account linked to the PF account must be in the name of the account holder.
• Personal details like the father’s name and Date of birth should match the identity proof.

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Steps to Follow for Premature PF Withdrawals

Given below are the steps that you need to follow to do premature PF withdrawals -

• Step 1: Open the EPFO website or click on the link
• Step 2: Under the services tab, click on “for employees.”
• Step 3: Click on the “Member UAN” link to access the UAN portal.
• Step 4: Fill in your UAN ID, password and captcha displayed on the screen to sign in
• Step 5: Once you have successfully logged in, you will see your profile on the screen. Click on KYC under the “Manage” tab.
• Step 6: Once you get redirected to the page, check your KYC details by scrolling down to the "Digitally Approved KYC" section at the bottom of the page. Make sure all of the information is correct.
• Step 7: If all of the KYC details are accurate, click the "Online Service" link from the top menu to proceed with the withdrawal. From the drop-down menu, select "CLAIM (FORM-31, 19, and 10C)."
• Step 8: On the next screen, you will be prompted to input and validate the last four digits of your registered bank account number.
• Step 9: Click “Yes” on the certificate pop-up to proceed.
• Step 10: On the next page, select the "PF ADVANCE (FORM - 31)" option from the drop-down menu next to the "I wish to apply for" option for online fund withdrawal.

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Taxability of PF Withdrawal

EPF withdrawals are tax-free if an employee has contributed to the EPF account for five consecutive years. If there is a break in the five years of contributions, the EPF withdrawal amount becomes taxable for that financial year.

TDS is deducted if an employee withdraws EPF before completing five years and the amount exceeds Rs. 50,000. The TDS rates are as follows:

• TDS of 10% is deducted if the employee withdraws more than Rs. 50,000 before completing five years and provides their PAN card.
• If the employee does not provide their PAN card, a TDS of 34.608% (including cess) is deducted from the withdrawal amount.
• No TDS is deducted if the employee submits Form 15G/15H. Form 15G can be downloaded from the EPFO portal or major bank websites.

Here are some cases where PF is Exempt from TDS -

• TDS is not applicable if the termination of service is beyond the control of any individual company lockouts, retrenchment, and employee layoffs fall under this category.
• TDS is not applicable when the service termination is because of a serious medical condition like physical or mental disabilities, making it impossible to work.

No TDS is deducted when an employee withdraws EPF after completing five years of continuous service, regardless of the withdrawal amount.

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Online Grievance Portal for PF Withdrawal

If you wish to register a grievance regarding the services provided by the EPFO, you can use the EPF Grievance Management System online. This system allows you to file a new grievance, send reminders, check the status of your complaint, and upload any relevant documents related to your grievance. Additionally, you can also change your password through the system. It provides a convenient platform to manage and track the resolution of your grievances efficiently.

How to Register a Grievance?

To register a grievance on the EPFO Grievance Management System, follow these steps:

1. Visit the EPFO Grievance Management System and click on "Register Grievance".
2. Fill out the grievance registration form, ensuring all required fields are completed accurately.
3. Select your status from the available drop-down options.
4. Enter details such as your PF number, establishment name and address, complainant name, contact details, and grievance description. Complete the captcha code and click on ‘Submit’.

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