Procedure of Provident Fund Withdrawal in India

The government of India has simplified the process by launching the Unique Identification Number (UAN). This number will remain same throughout the career of an employee.

Purposes for Withdrawal of PF Balance

• Marriage: Only salaried employee, who has completed 7 years of service in the same company can withdraw 50% of the balance contributed in EPF, thrice in a year, for bearing the expenses incurred during the marriage.
• Medical Treatment: A salaried employee can withdraw up to six times of his/her salary or the whole accumulated PF fund for the treatment of spouse, self, children, and parents.
• For Construction or Purchase of Plot: Withdrawing the EPF amount for purchasing a plot of land or for some construction is possible if the property is registered in the name of the employee or spouse. A minimum of 5 years of service is required to withdraw an amount, 24 times that of the salary of the employee. For the construction of property, the amount can be 36 times that of the salary of the account holder. The withdrawal can be done only once during the service of an account holder.
• For House Renovation or Alteration: To withdraw from an EPF account for renovation or alteration of the house, the house should be registered in the name of the employee, spouse, or jointly owned by the spouse. A minimum of 5 years of service is required in order to withdraw up to 12 times that of the salary of the account holder.
• For Repayment of Home Loan: To withdraw from EPF Account for repaying the Home loan, the house should be registered in the name of the employee, spouse or must be held jointly. A minimum of 10 years of service is required for withdrawing up to 36 times of the salary of an account holder.
• Retirement: An individual must be 54 years old to withdraw up to 90% of the amount accumulated in the EPF Account.
• Other Purposes: An employee can choose to withdraw from EPF Account for other reasons also, like for Premature Retirement because of some physical or mental disability or for settling down in a foreign country.

Taxation on EPF Amount

If the employee withdraws the EPF balance before completing 5 years of service, then the balance which is withdrawn is taxable. But if the balance withdrawal is less than Rs. 50,000, then it will be exempted from tax.

For calculating 5 years of service, it is not necessary for the employee to continue the service in one organization only; he may work in different organizations. But whenever the employee changes jobs, he must transfer the balance of EPF to the new company’s PF account. No tax is deducted if the employee withdraws the PF after 5 years of service. If Form 15G and Form 15H are submitted by the employee, then no Tax Deducted at Source (TDS) will be deducted. Form 15H is submitted by the senior citizens and Form 15G is submitted by those who are below the age of 60.

Grievances related to the withdrawal of EPF amount can be resolved by reading the detailed procedure stated in Consumer Protection Act.

Modes for Withdrawal of PF Amount

For withdrawing PF amount, the employee needs to have Form 19. It is either given by the employer or downloaded online from EPF India website. This form must be submitted to the regional office and PF amount along with the interest earned is received by the applicant within a few days.

The following are the ways by which an employee can withdraw his/her PF:

• By submitting application forms Online: PF forms can be submitted online via Universal Account Number (UAN). No approval is required from any previous employer to get this application processed. PF cannot be withdrawn if an employee doesn’t have UAN.
• By submitting the application forms directly to the regional post office: Get a PF withdrawal form from the regional post office. Fill the form and submit the same to the regional provident fund office.

  The withdrawal form needs to be attested by any of the following authority:

  • By Manager of any bank
  • A Gazetted Officer
  • Magistrate / President of Village Panchayat / Notary Public / Post / Sub Post Master.

Withdrawal of EPF Without Employer’s Signature

Employees can withdraw EPF from the previous employer without getting it signed. It is quite difficult for the employee to get the form signed by the previous employer after resigning from the job. Earlier, it was mandatory for employees to have the attestation of the form to facilitate withdrawal.

However, now there are two ways to withdraw EPF without the signature of the employer:

Reasons which State that Pre-Mature PF Withdrawal is not a Good Option

There are many reasons which state, that PF withdrawal is not a good option. Some of the reasons are:

• It is a retirement benefit, which is helpful at the time of retirement.
• If the amount is withdrawn before 5 years then the employee is liable to pay tax.
• PF can be transferred easily even after switching to a new job. So, it can be used as a saving.

EPF is a retirement benefit which is given to the employees. This amount is transferred to EPF account and can be withdrawn by the employee for special purposes. If it is withdrawn before completion of 5 years of service, then it is taxable.