Employees’ Provident Fund is considered as an investment option for a comfortable life post retirement. However, if you have quit or lost your job, or need some money for the medical treatment of your child or the construction of your new house, then withdrawal of your EPF funds almost becomes a necessity.
Given below is a detailed procedure to undertake this task of withdrawal of your EPF online.
When are EPF withdrawals made?
- When the employee is no longer employed
- When he or she retires from active service.
- When he or she needs the funds for some emergency purpose.
Eligibility criteria for EPF Withdrawals
- Total amount can be withdrawn only after the retirement of the employee from active service.
- Exceptions to the above condition are the case of medical emergencies, children’s higher education, or if you’re buying or constructing a house.
- One can also withdraw PF amounts if he or she becomes unemployed prior to retirement either due to lockdown or retrenchment.
Documents that you must have before making the Withdrawal Claim
- UAN number
- Bank account details along with an account statement
- Identity proof
- Composite Claim Form
- Address proof
- Cancelled cheque with clearly visible IFSC code and account number
- Two revenue stamps
In case the employee is withdrawing the amount before 5 consecutive years of service, then he or she is to provide ITR Form 2 and ITR Form 3 to prove the amounts deposited to the account in the previous year.
Step-by-step EPF Online Withdrawal Process
- Go to the EPF Portal and sign in using your UAN and password.
- Click the ‘Online Services’ tab and select ‘Claim (Form-31, 19 & 10C)’
- Verify your member details. Enter the last 4 digits of your bank account and then click “Verify”.
- Click the ‘Yes’ button and then click the ‘Proceed for Online Claim’ option.
- Select the ‘PF Advance (Form 31)’ button.
- Select the ‘Purpose for which advance is required’. Enter the amount and your address. If you are not eligible for withdrawal, then the request will be marked red. If not, click certification and submit your application.
- Submit relevant scanned documents.
- It can take 15 to 20 days for the amount to be processed.
What are the amounts that can be withdrawn?
- You can withdraw 90% of the PF amount one year before retirement.
- You can withdraw 75% of the EPF balance after one month of unemployment.
- You can withdraw the remaining 25% after two months of unemployment.
Benefits of EPF Withdrawal Online
- Hassle-free withdrawal with no requirement of standing in queues and visiting offices.
- Lower Processing Time as the entire process will result in the amount being credited into one’s bank account within 15-20 days of the application.
Conditions Attached to Early EPF Withdrawal
The exceptions to early withdrawal come with a number of conditions attached to it. They are as follows –
|Cause for Early Withdrawal||Conditions Attached|
|Construction or purchase of a new house||You have to be working at the same company for five years. The PF account holder and his or her spouse are the only members who are authorised to apply for withdrawal. The amount that can be withdrawn from the PF account is limited to-24 times the monthly salary if you are buying a house36 times the monthly salary if you’re buying a house or if there is any construction.|
|Repayment of home loan||You must be working with the company for at least three years.The PF account holder and his or her spouse are the only members who are allowed to apply for withdrawal.You can withdraw 90% of the amount.|
|Renovation of a house||You must be working with the company for at least five years.The PF account holder and his or her spouse are the only members who are allowed to apply for withdrawal.You can only withdraw 12 times the monthly salary.|
|Wedding||You must be working with the company for at least five years.The PF account holder, his siblings and/or children can apply for withdrawal of the PF amount.You can only withdraw 50% of the employee’s contribution with interest.|
|Medical treatment||No minimum working period required.The PF account holder, his or her parents, spouse or children can apply for withdrawal of the PF amount.You can withdraw- your share with interest; or6 times your monthly salary|
Taxation on EPF Withdrawals
The following EPF amount withdrawals will be taxed –
- Withdrawals made before completion of 5 years of continuous service.
- If there is a break in the 5 year time period then the entire amount is liable to be taxed.
- If the amount is greater than Rs. 50,000, then TDS will be deducted for premature withdrawal.
- If an employee furnishes a PAN card with the application, then TDS of 10% will be payable; whereas a 30% TDS plus tax will have to be paid if the employee is unable to provide a PAN card.
- If an employee has claimed exemption, as per Section 80C of the Income Tax Act, on EPF contribution for the previous years on EPF, they will be liable to pay tax on employee’s contribution, employer’s contribution and interest on each deposit.
Tax exemption for EPF is available only if certain conditions are fulfilled. They are as follows –
- Employees must have contributed to EPF accounts for a period of 5 years continuously and withdrawals made after this time period is exempt.
- An employee who has filled Form 15G or Form 15H is not liable to pay tax.
- Transfer of funds from EPF account to NPS account is not taxable.
- If there has been no claim made by the employee as per Section 80C of the Income Tax Act in the previous years, the employee contribution part will be exempt from tax.
Frequently Asked Questions
- Can EPF withdrawals be done offline?
One can download the composite claim form from the EPFO portal, fill it and submit to the respective jurisdictional EPFO office without the attestation of the employer for offline withdrawals.
- Are EPF contributions eligible for tax deductions?
EPF contributions are eligible for tax deduction under Section 80C of the Income Tax Act, 1961.
- Is there employer’s permission required to withdraw funds from EPF?
No, as per the new amendment employer’s permission is not needed to make the EPF withdrawals.