Provident Fund (PF) or Employee Provident Fund (EPF) Scheme
PF, also known as the Employee Provident Fund Scheme, involves employees contributing a small portion of their remuneration, i.e., 12% of their basic pay every month. A matching amount is contributed by the employer. Together, these contributions form a corpus intended to fund the employee's retirement. However, EPF withdrawal by employees can occur earlier during their employment under certain circumstances, which are elaborated later in the article. It is important to note that the EPF organization has made the allotment of the Universal Account Number (UAN) compulsory for all employees covered under the PF Act. The UAN is linked to the employee's EPF account and remains portable throughout the employee's lifetime, eliminating the need to apply for EPF transfer when changing jobs.
EPF Withdrawal
1. When can EPF be withdrawn
- EPF can be completely or partially withdrawn under specific circumstances:
a. Complete withdrawal is allowed when an individual retires from employment or remains unemployed for a period of 2 months or more. The unemployment must be certified by a gazetted officer. Complete withdrawal during job transitions without a 2-month unemployment period is against PF rules and regulations and is illegal.
- Partial withdrawal is permitted under certain conditions:
1. Marriage – Up to 50% of the employee's contribution to EPF can be withdrawn. The employee must have at least 7 years of service. This is applicable for the marriage of self, son/daughter, brother/sister.
2. Education – Up to 50% of the employee's contribution to EPF can be withdrawn. The employee must have at least 7 years of service. This is applicable for the education of self or children after class 10.
3. Purchase of Land/House – For land, up to 24 times the monthly wages plus dearness allowance can be withdrawn. For a house, up to 36 times the monthly wages plus dearness allowance can be withdrawn. The employee must have at least 5 years of service. The asset must be in the name of the employee, spouse, or jointly.
4. Home Loan Repayment – Up to 90% of the contributions from both employee and employer can be withdrawn. The employee must have at least 10 years of service. The property must be registered in the name of the employee, spouse, or jointly. Withdrawal is subject to furnishing requisite documents related to the housing loan, and the PF account balance must exceed Rs 20,000.
5. Renovation of House – Up to 12 times the monthly wages can be withdrawn. The employee must have at least 5 years of service. The property must be registered in the name of the employee, spouse, or jointly.
6. Before Retirement – Up to 90% of the accumulated balance with interest can be withdrawn once the employee reaches 57 years of age, as per recent amendments.
2. Procedure for EPF Withdrawal
- EPF withdrawal can be done through:
1. Submission of a Physical Application
- Download the new composite claim (Aadhar) or composite claim form (Non-Aadhar). The Aadhar form can be submitted to the respective jurisdictional EPFO office without employer attestation, while the Non-Aadhar form requires employer attestation. Recently, the requirement for various certificates for partial withdrawal has been removed, and self-certification is now an option for EPF subscribers.
2. Submission of an Online Application
- The EPFO has introduced an online withdrawal facility, making the process easier and less time-consuming. Prerequisites include an activated UAN and a working mobile number used for UAN activation. The UAN must be linked with KYC details, including Aadhaar, PAN, and bank details with the IFSC code. If these conditions are met, employer attestation is not required for withdrawal.
- Steps to Apply for EPF Withdrawal Online
- On the "For Employees" page, click on "UAN/Online Service (OCS/OTCP)" under the "Services" section. This will take you to a new page – https://unifiedportal-mem.epfindia.g...mberinterface/. Log in with your UAN and password.
- After logging in, verify KYC under the "Manage" tab. Scroll down to the "Digitally Approved KYC" section and ensure all details, including PAN, Aadhaar, and Bank Account, are correct.
- If all KYC details are correct, click on the "Online Service" tab in the top menu to proceed with the withdrawal. Click on "CLAIM (FORM – 31, 19, 10C & 10D)." You will be redirected to a new webpage to choose the claim form type – PF Withdrawal/PF Advance/Pension Withdrawal. Proceed with the withdrawal claim by providing details and documents. For PF Advance (Form 31), upload a scanned copy of your cheque from the verified bank account.
From India, Ghaziabad
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256PF, also known as the Employee Provident Fund Scheme, involves employees contributing a small portion of their remuneration, i.e., 12% of their basic pay every month. A matching amount is contributed by the employer. Together, these contributions form a corpus intended to fund the employee's retirement. However, EPF withdrawal by employees can occur earlier during their employment under certain circumstances, which are elaborated later in the article. It is important to note that the EPF organization has made the allotment of the Universal Account Number (UAN) compulsory for all employees covered under the PF Act. The UAN is linked to the employee's EPF account and remains portable throughout the employee's lifetime, eliminating the need to apply for EPF transfer when changing jobs.
EPF Withdrawal
1. When can EPF be withdrawn
- EPF can be completely or partially withdrawn under specific circumstances:
a. Complete withdrawal is allowed when an individual retires from employment or remains unemployed for a period of 2 months or more. The unemployment must be certified by a gazetted officer. Complete withdrawal during job transitions without a 2-month unemployment period is against PF rules and regulations and is illegal.
- Partial withdrawal is permitted under certain conditions:
1. Marriage – Up to 50% of the employee's contribution to EPF can be withdrawn. The employee must have at least 7 years of service. This is applicable for the marriage of self, son/daughter, brother/sister.
2. Education – Up to 50% of the employee's contribution to EPF can be withdrawn. The employee must have at least 7 years of service. This is applicable for the education of self or children after class 10.
3. Purchase of Land/House – For land, up to 24 times the monthly wages plus dearness allowance can be withdrawn. For a house, up to 36 times the monthly wages plus dearness allowance can be withdrawn. The employee must have at least 5 years of service. The asset must be in the name of the employee, spouse, or jointly.
4. Home Loan Repayment – Up to 90% of the contributions from both employee and employer can be withdrawn. The employee must have at least 10 years of service. The property must be registered in the name of the employee, spouse, or jointly. Withdrawal is subject to furnishing requisite documents related to the housing loan, and the PF account balance must exceed Rs 20,000.
5. Renovation of House – Up to 12 times the monthly wages can be withdrawn. The employee must have at least 5 years of service. The property must be registered in the name of the employee, spouse, or jointly.
6. Before Retirement – Up to 90% of the accumulated balance with interest can be withdrawn once the employee reaches 57 years of age, as per recent amendments.
2. Procedure for EPF Withdrawal
- EPF withdrawal can be done through:
1. Submission of a Physical Application
- Download the new composite claim (Aadhar) or composite claim form (Non-Aadhar). The Aadhar form can be submitted to the respective jurisdictional EPFO office without employer attestation, while the Non-Aadhar form requires employer attestation. Recently, the requirement for various certificates for partial withdrawal has been removed, and self-certification is now an option for EPF subscribers.
2. Submission of an Online Application
- The EPFO has introduced an online withdrawal facility, making the process easier and less time-consuming. Prerequisites include an activated UAN and a working mobile number used for UAN activation. The UAN must be linked with KYC details, including Aadhaar, PAN, and bank details with the IFSC code. If these conditions are met, employer attestation is not required for withdrawal.
- Steps to Apply for EPF Withdrawal Online
- On the "For Employees" page, click on "UAN/Online Service (OCS/OTCP)" under the "Services" section. This will take you to a new page – https://unifiedportal-mem.epfindia.g...mberinterface/. Log in with your UAN and password.
- After logging in, verify KYC under the "Manage" tab. Scroll down to the "Digitally Approved KYC" section and ensure all details, including PAN, Aadhaar, and Bank Account, are correct.
- If all KYC details are correct, click on the "Online Service" tab in the top menu to proceed with the withdrawal. Click on "CLAIM (FORM – 31, 19, 10C & 10D)." You will be redirected to a new webpage to choose the claim form type – PF Withdrawal/PF Advance/Pension Withdrawal. Proceed with the withdrawal claim by providing details and documents. For PF Advance (Form 31), upload a scanned copy of your cheque from the verified bank account.
From India, Ghaziabad
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Provident Fund - Excluded Employee - Definition.pdf