PF Withdrawal in India

Employees’ Provident Fund (EPF) is an Indian social security and savings scheme for employees. Employers with more than 20 employees must get PF registration and adhere to PF contribution regulations. Employees who have contributed to PF can withdraw funds from their PF accounts for a variety of reasons by submitting an application through the Unified Portal. In this article, we will look at the application process and the documentation needed for PF withdrawal.

PF withdrawal reasons:

Employees can request an advance, withdrawal, or settlement of the amount in their PF account. Any of the following reasons can be used to request a PF advance or withdrawal:

  • PF Settlement
  • Pension Withdrawal Benefits (only if the service is less than 10 years)
  • PF Part Withdrawal

PF Settlement:

An employee may apply for PF settlement for any of the following reasons:

  • Member’s ill health
  • Employer’s company is being contracted/discontinued.
  • Other factors beyond the member’s control
  • Marriage (for female members)
  • Permanent Settlement Abroad

Full PF withdrawal

The money in an EPF account can be withdrawn in full or in part. The following are the situations in which complete EPF withdrawal is permitted:

An employee’s EPF balance can be totally withdrawn when he or she retires from work; or

When an individual is unemployed for two months or more, the EPF amount can be withdrawn in full. To claim the entire EPF amount on the basis of unemployment, the fact of unemployment must be certified by a gazetted authority.

Partial PF withdrawal

Partial withdrawal of EPF funds is permitted only in certain circumstances and once certain conditions are met. The following are the circumstances and conditions:

Marriage

Because of the marriage of an individual, son/daughter of an individual, or siblings of an individual, 50 percent of the employee’s share of EPF withdrawal is permitted only if the individual has served for at least 7 years.

Education

Individuals may withdraw up to 50% of their EPF contributions for their own education or the education of their children. Furthermore, withdrawal is permitted only if the individual has completed at least 7 years of service, and withdrawal is permitted only for post-secondary education.

Purchase of land/ construction of the house

Withdrawal of EPF is permitted for the purchase of land or the purchase/construction of a dwelling subject to the following conditions/restrictions:

  • Five years of service should be completed;
  • The house/land sought to be purchased/constructed should be in the name of the employee, his or her husband, or jointly in the names of the employee and spouse.
  • In the case of land purchase, the maximum allowable amount is 24 times the monthly wage.
  • In the case of a property purchase or building, the maximum permissible amount is 36 times the monthly earnings.
  • The property should be free of all encumbrances and duly registered, with documentation of such registration supplied.

Existing Home Loan Repayment

On the condition that the following conditions are met, a limited EPF withdrawal is permitted if the funds are needed to repay an existing home loan:

  • The employee has served for a total of ten years.
  • Withdrawal for home loan repayment is permitted just once in his lifetime.
  • If the employee has been allowed to withdraw EPF for the acquisition of land/purchase/construction of a house, he will not be allowed to withdraw EPF for home loan repayment. In other words, the employee can either withdraw for the purchase/construction of land/house or for the repayment of a home loan; withdrawal in both cases is not permitted.
  • The property should be in the employee’s name, the employee’s spouse’s name, or jointly in the names of the employee and spouse.
  • The maximum permissible withdrawal is 36 times the employee’s monthly income.
  • As proof, a house agreement, home loan sanction letter, and other necessary documents as requested by the Employee Provident Fund Organization (EPFO) office must be supplied.
  • Withdrawals are permitted from both the employee’s and the employer’s contributions.

Renovation of house

An employee may withdraw EPF funds for the purpose of renovating, repairing, or altering his or her home only if the following conditions are met:

  • The employee should have completed a minimum of ten years of service.
  • The employee may withdraw EPF only once in his or her lifetime for house restoration, repair, or alteration.
  • The property should be in the employee’s name, the employee’s spouse’s name, or jointly in the employee and spouse’s name.
  • The house that will be renovated, repaired, or altered must be at least 5 years old from the date of completion of construction.
  • The maximum permissible withdrawal is 12 times the employee’s monthly income.
  • The withdrawal is only permitted from the employee’s personal contribution.

Prior to Retirement

According to EPF rules, the retirement age is 58 years, and so an EPF withdrawal of up to 90% of the cumulative amount plus interest is permitted in the case of a preceding retirement withdrawal at the age of 57 years. In layman’s words, once an employee reaches the age of 57, he is allowed to withdraw 90% of his EPF contribution.

Medical treatment

Employees may withdraw their EPF funds for medical treatment. The conditions for withdrawal in the case of medical treatment are fairly liberal, and they are outlined below:

  • Medical treatment for the employee, his spouse, parents, and children;
  • Withdrawal is permitted if you are hospitalized for more than one month for any reason.
  • Withdrawal is also permitted in the case of a significant surgical procedure.
  • In the event of leprosy, mental illness, cancer, or paralysis,
  • TB or a heart condition, and the employer has approved leave for treatment;
  • Withdrawal is permitted at any moment and there is no requirement to complete a set number of years of service.
  • Withdrawal is permitted for up to 6 months of the employee’s salary.

Documents for PF Withdrawal Are Required

To begin a PF withdrawal, the employee must submit a PF withdrawal application to the EPFO office in question. Along with the application for PF withdrawal, the employee must additionally submit the following supporting documents:

  • PF withdrawal for a housing loan, the purchase of site/home/flat, the construction of a new house, the addition of a room to an existing house, or the repayment of a housing loan.

It is necessary to obtain a new Declaration Form/Utilization Certificate.

  • The factory may be locked out or closed.

There is no documentation necessary.

  • Illness of a family member.

ESIC facility is not available to the member, according to a doctor’s certificate and a certificate from the employer.

  • Self/son/daughter/brother/sister marriage

A marriage certificate is necessary.

  • Purchase of equipment by physically disabled people.

It is necessary to have a medical certificate.

  • Varistha Pension Investment Bima Yojana

Transferring 90% of the total PF balance to LIC is possible.

PF Withdrawal Form 11

Employees with UAN whose details such as Aadhaar, Bank Account, and PAN have been updated on the Unified Portal are eligible for PF Withdrawal Form 11. Employees filing PF Claim Form 11 may do so directly to the relevant EPFO office, without the employer’s authentication of the claim form.

PF claim Form 19

PF Withdrawal Form 19 is only applicable to employees who do not have a UAN. The EPFO has granted UAN to all employees who contributed to their PF after 2014. If an employee has only paid PF contributions prior to 2014, he or she can apply for a UAN at the local EPFO office. PF Claim Form 19 can also be submitted without a UAN by stating only the PF Account Number. To file PF Withdrawal Form 19, however, the employer’s attestation is required.

PF withdrawal status

After filing the PF withdrawal application online on the Unified Portal or in person at the relevant EPFO office, the employee can monitor the status of his or her PF claim on the EPFO website, the UMANG app, or through the missed call facility.

Summary:

On March 26, the Government of India announced that some adjustments to the withdrawal of provident fund (PF) from Employee’s Provident Fund would be made (EPF). The government announced this move to mitigate the impact of Coronavirus on people in the event of a financial crisis. The law specifies that you can withdraw up to three months of basic and dearness allowance (DA) or 75 percent of the account’s credit balance, whichever is less. You can also visit the EPF’s official website or contact your employer for further information on the PF withdrawal process.

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