Employees Provident Fund Organization (EPFO), regulates The Employee Provident Fund (EPF), which helps employees save a small fraction of their salary every month. It helps to cater the financial requirements after retirement. Salaried employees can choose to withdraw money at the time of any major events like medical treatment, weddings, home renovation etc. Any organization with more than 20 employees is required to be registered with Employees Provident Fund Organization (EPFO).
In Employees Provident Fund (EPF) account, 12 percent of the basic pay of the salaried employee is contributed towards the fund on a monthly basis. The equal portion is contributed by the employer, and from this contribution, only 3.67% is deposited in the EPF Account and the rest 8.33% is deposited in the employee’s pension scheme. The current rate of interest for an EPF account is 8.65%. This rate keeps on changing every year.
For withdrawing PF, employees have to submit Form 19, duly signed and attested to their ex-employers. In addition to this, they are required to submit various other documents like resignation letter, canceled cheque etc. to the Employees Provident Fund Organization (EPFO). An employee can withdraw the PF account balance only for some special purposes. It is advised by the experts, to transfer the PF Balance from their previous employer’s account into the account of their current employer, instead of withdrawing it.
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.
If the employee withdraws the EPF balance before completing 5 years of service, then the balance which is withdrawn is taxable.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.
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:
The withdrawal form needs to be attested by any of the following authority:
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.
With Aadhar card:
Without an Aadhar card:
EPF balance can be withdrawn without an aadhar card, by following the below mentioned steps:
There are many reasons which state, that PF withdrawal is not a good option. Some of the reasons are:
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.
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