Organizations have discovered that the most important asset of a company is its human resource. This reasons why most employers have strengthened their personnel management for their employees. One such provision provided by companies is the Employee Provident Fund (EPF).
1. What is EPF?
Employee Provident Fund (EPF/PF) is a scheme launched in favor of employees under which a certain percentage of the income is contributed monthly by employees. The same amount is also contributed by the employer which adds to the employee’s contribution as a collection of funds. This fund serves the purpose of providing financial support after the employee’s retirement. This PF can be utilized by employees even during employment.
It has been made mandatory by the EPF organization for all employees under the Provident Fund Act to have a Universal Account Number (UAN). This number remains the same throughout the lifetime of an employee. The UAN is linked to the EPF account of the employee and thus the need for transferring EPF with job switch is eliminated.
2. When can we Withdraw EPF?
The EPF money can be withdrawn by individuals after two months from the cessation of employment. This only applies to those whose unemployment has been certified by authorized officers.
An EPF may be withdrawn completely or partially.As per the new rule, EPFO allows withdrawal of 75% of the EPF corpus after 1 month of unemployment. The remaining 25% can be transferred to a new EPF account after gaining new employment. It becomes illegal to withdraw EPF completely without being unemployed for two consecutive months.
The conditions under which EPF can be withdrawn partially are:
- For Marriage: Employees having served for minimum 7 years can withdraw 50% of their EPF for marriage of self, siblings, or children.
- For Education: Employees having served for minimum 7 years can withdraw 50% of their EPF for education of self or children above 10th grade.
- For Land Purchase: Employees having served for minimum 5 years can withdraw 24 times their monthly income plus dearness allowance for purchasing land in name of self and/or spouse.
- For House Purchase/Construction: Employees having served for minimum 5 years can withdraw 36 times their monthly income plus dearness allowance for purchasing/construction house in name of self and/or spouse.
- For Payment of Home Loan: Employees having served for minimum 10 years can withdraw 90% of EPF (employee’s and employer’s) for payment of Home Loan in name of self and/or spouse along with the required documents. The accumulation in the employee’s account along with the interest must be over Rs. 20,000 in this case.
- For House Renovation: Employees having served for minimum 5 years can withdraw 12 times their monthly income plus for renovating a house in name of self and/or spouse.
For partial withdrawal of EPF, PF Advance Form 31 must be filled by the employee.
3. Procedure for EPF Withdrawal
There are two methods of withdrawing EPF: Offline or Physical method, and Online Method.
3.1 Offline Withdrawal
Offline withdrawal of EPF requires a physical application. The form can be downloaded online through the EPFO website.
There are two forms available for physical application:
- Aadhaar Composite Claim Form (New): Submitted to jurisdictional EPFO office without employer’s attestation.
- Non-Aadhaar Composite Claim Form: Submitted to jurisdictional EPFO office with employer’s attestation.
3.2 Online Withdrawal
The process of online EPF withdrawal usually takes about 15-20 days. For online withdrawal, it is required that the employee has a working UAN which is linked to his/her details of bank, Aadhaar, and PAN. If these conditions are met, then you may proceed to these simple steps for online EPF withdrawal:
Step 1: Go to the EPFO/UAN Member portal and sign in with your UAN and password
Step 2: Check if your KYC is verified by clicking ‘KYC’ under ‘Manage’
Step 3: Click ‘Online Services’ from the top menu bar and select ‘Claim (Form-31, 19, & 10C)’
Step 4: The member’s details will be displayed. Enter your bank account’s last 4 digits and click ‘Verify’
Step 5: Sign the undertaking by clicking ‘Yes’ and then ‘Proceed for Online Claim’
Step 6: Select the claim form in the section ‘I want to apply for’. This form is usually ‘PF Advance (Form 31)’ for online EPF withdrawal. However, there are other forms for EPF final settlement or withdrawal of pension. It is noteworthy that all options for ineligibility of employee will be marked in red or won’t be shown.
Step 7: Select your ‘Purpose for which Advance is Require’ and tick the declaration
Step 8: Submit the form along with the scanned copies of required documents, if any
Step 9: After your employer approves your request for EPF withdrawal, the money will be deposited in the bank account you have mentioned from your PF account.
Online EPF withdrawal is beneficial because it requires less paperwork, and is hassle-free. The process of EPF withdrawal takes much lesser time as compared to the offline process. Also, the need to visit employers for attestation is eliminated in the online process. One can easily check the EPF status online through the member portal.