EPF or PF Withdrawal Rules

PF, or Provident Fund, is a contribution-based savings scheme where both the employee and the employer contribute to create a monetary fund to cater to post-retirement necessities. The corpus created can be accessed or withdrawn by the employee subject to certain Provident Fund withdrawal rules.

The Employee Provident Fund in India is administered by a statutory body, Employees’ Provident Fund Organisation, offering a financial backup for Indian residents employed in the organised sector.

Withdrawal of Provident Fund

PF is meant to be withdrawn after an individual’s retirement. However, there are certain Provident Fund withdrawal rules that allow the individual to utilise the accumulated sum for emergency purposes.

Account-holders can make three different types of PF withdrawals, namely–

• PF final settlement.
• PF partial withdrawal.
• Pension withdrawal benefit.

An individual can withdraw a partial amount from his or her employee provident fund account before its maturity (except in the case of unemployment) under certain situations. 

Here are some of the circumstances that allow an individual to prematurely withdraw the sum.

EPF Withdrawal Rules 2023

Here are some of the basic rules that one must take note of-

1. An individual is not permitted to withdraw PF funds, partially or fully, until the time he/she is employed.
2. One can withdraw up to 75% of the funds if he/she is unemployed for at least 1 month and the balance amount if they are unemployed for 2 months or more.
3. One cannot avoid the deduction of TDS by producing Form 15H/Form 15G.
4. If an individual intends to withdraw Rs 50,000 or more amount from the corpus within 5 years of opening the EPF account, a TDS of 10% will be levied (if he/she has a valid PAN Card) or 30% (if he/she does not have a PAN Card)
5. One can avail of a loan against the PF savings only when he/she has been in service for a certain number of years.
6. An individual is not required to withdraw the balance from his/her old PF account to the new one while changing jobs. The money can easily be transferred if your UAN is active and relevant forms have been submitted.
7. One can withdraw the full PF balance if he/she has been unemployed for at least 2 months or else if the joining date of the new job is more than 2 months after the last working day of the previous company.

Common Reasons for Provident Fund Withdrawal with Applicable PF Withdrawal Rules

Here are some reasons for PF withdrawal, along with the applicable rules for each case-

• In Case of Unemployment 

A PF account holder can withdraw up to 75% of the total accumulated amount if he/she has been unemployed for more than 1 month after relinquishing employment. This provision also allows the account holder to withdraw the remaining 25% if the unemployment period stretches over 2 months.

• For Education 

PF account holders can withdraw up to 50% of the total employee’s contribution to EPF to pay for their higher education or to bear the education cost of their children after class 10. 

The funds will be transferable after contributing a minimum of 7 years towards the EPF account.

• To Pay for Marriage 

The latest PF withdrawal rules also allow an account holder to withdraw up to 50% of the employee’s share to pay for the necessary expenses for a marriage. 

The marriage should be of the individual concerned, or the account holder’s son, daughter, brother, and sister. However, this provision can be utilised only after the completion of 7 years of PF contribution.

• For Specially-abled Individuals 

Under the PF withdrawal rules 2023, specially-abled account holders can withdraw 6 months basic wage along with dearness allowance, or employee share with interest (whichever is less), to pay for the cost of equipment.

This decision was made to help ease the financial burden individuals might experience to purchase expensive equipment.

• For Medical Emergencies

A PF or EPF account holder can also withdraw the EPF balance to pay for urgent medical treatments for certain diseases. This facility is allowed for both self-usage or to pay for treatment of immediate family members.

One can withdraw 6 month’s basic wage and dearness allowance, or the employee share along with interest, whichever is less.

• To Pay for 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. 

However, this facility is available only after a minimum of 10 year’s contribution towards the EPF account.

• To Purchase Residential Property or Land Plots

According to PF withdrawal rules, the account holder is allowed to make a premature withdrawal to purchase empty land or prefabricated houses. 

EPFO has allocated a PF withdrawal limit for this purpose; for example – 

• For Home Renovation

Provident fund new rules also come with a provision to withdraw 12 month’s basic wage plus Dearness Allowance, as well as the employee’s share with interest (whichever is smaller) for home alteration, improvement, or expansion. 

The residential property can be of the PF account holder, owned by his or her spouse, or owned jointly.

An individual can avail this facility 2 times, once after 5 years of completing the residential property, and after 10 years can withdraw PF amount for the first time.

Revised EPF withdrawal rules also allow an account holder to withdraw up to 90% of the accumulated funds after they reach 54 years of age or a year before retirement/superannuation. 

Also, in case of the sudden demise of an employee (while he or she is still in service), their nominee/beneficiary can apply for a settlement (Form 20), or a monthly pension (Form 10D).

PF withdrawal rules provide adequate flexibility to allow an individual to cater to various emergency requirements using their savings. 

One can also choose to invest in other high-return investment options, like Mutual Funds, if they have surplus funds after utilising the withdrawn amount. 

These investment options offer a higher return than traditional savings schemes, while tax saving Mutual Funds can also help an individual to decrease their tax liability.

Steps to Enter, Exit and Withdraw PF

If your Provident Fund (PF) withdrawal is being delayed, it could be because the exit date has not been specified. To avoid this, the Employees’ Provident Fund Organisation (EPFO) has created a feature on the Unified Portal where the employee can input the date of departure from the previous employer on his or her own. Previously, only the employer could enter the exit date, but now employees can do so as well.

By login into the UAN portal with your Universal Account Number (UAN) and password, you can adjust the exit date. However, you must verify to see if the exit date is listed by clicking on ‘Service History’ in the top panel under ‘View.’

The following are the steps you must take in order to enter the Exit Date:

• Enter your Unified Account Number and Password to access your UAN site.
• On the top panel, select ‘Manage,’ then ‘Mark Exit,’ which is found beneath it.
• Select the employer from the drop-down menu.

You will be taken to a new page where you must input your birth date, date of joining, and date of exit. If your departure date is before the 15th of the month, refer to the date on your resignation letter.

Documents Required for EPF Withdrawal

The following listed documents are required to withdraw PF amount-

• Universal Account Number (UAN)
• Identity and address proof
• Bank account information of the EPF subscriber
• Cancelled cheque with IFSC code and account number

Grievance Portal of PF Withdrawal

If you have a complaint about the EPFO’s services, you can file it online through the EPF grievance handling system. You can file a grievance, send a reminder, check the status of your complaint or grievance, upload your grievance paperwork, and even change your password using this system.

Lowering Tax Burden on EPF Withdrawal

An account holder can also lower their tax liability on premature withdrawal of their PF amount. Usually, withdrawals are liable for TDS. 

But, according to the revised EPF withdrawal rules 2023, withdrawal of funds after a minimum of 5 years of service will attract no TDS.

Employee’s Provident Fund was already an attractive savings scheme, with the facility to transfer one’s EPF account with a UAN number, and with the provision to earn interest on the balance fund for up to 3 years without any contribution.

The new withdrawal rules have made the system even more beneficial for individuals working in the organised sector, thanks to the provision to avail funds at an emergency basis.

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