Everything You Need to Know About EPF: Withdrawal Process, Tax Implications, and More

The Employees’ Provident Fund (EPF), also known as Provident Fund (PF), is a mandatory, government-backed savings scheme aimed at providing financial security to employees after their retirement. It is managed by the Employees' Provident Fund Organisation (EPFO), and both employees and employers contribute to the fund. EPF is designed to help individuals accumulate savings during their working years and secure them financially after retirement.

What is the EPF?

EPF is essentially a retirement savings account where employees and employers contribute a percentage of the employee’s basic salary each month. The government offers interest on the contributions, and the accumulated amount can be withdrawn under certain conditions, typically at retirement or in the event of unemployment or specific circumstances like medical emergencies.

Employee’s Contribution

Every employee must contribute 12% of their basic salary to the EPF.

Employer’s Contribution

Employers are also required to contribute a matching amount of 12% of the employee's basic salary. This includes contributions to the employee's EPF, pension fund, and administrative charges.

For the financial year 2023-24, the government has increased the EPF interest rate to 8.25%.

When Can You Withdraw EPF?

You can either completely withdraw your EPF balance or make partial withdrawals under specific conditions.

Complete Withdrawal:

There are two primary situations where an employee can completely withdraw their EPF balance:

Retirement

Once you retire, you can withdraw the entire accumulated balance in your EPF account.

Unemployment

If you are unemployed for more than 1 month, you can withdraw up to 75% of the balance. After 2 months of unemployment, you can withdraw the remaining 25%.

Note: You cannot fully withdraw your EPF balance if you switch employers unless there is a break of two months or more between jobs.

Partial Withdrawal:

Partial withdrawals are allowed under certain circumstances, with specific limits depending on the nature of the withdrawal. These are:

How to Withdraw EPF Amount?

You can withdraw your EPF either by submitting a physical application or using the online application system.

Physical Application:

Composite Claim Form (Aadhaar)

Use this if your Aadhaar and bank details are linked to the Universal Account Number (UAN). You can submit this form directly to the EPFO office without your employer’s attestation.

Composite Claim Form (Non-Aadhaar)

Use this if your Aadhaar details are not linked. The form must be attested by your employer before submission.

Online Application:

The EPFO online withdrawal system streamlines the process, making it faster and more efficient. To apply online:

1. Activate your UAN (Universal Account Number) and make sure that your Aadhaar, PAN, and bank details are linked.
2. Login to the EPF UAN portal with your UAN and password.
3. Go to Online Services > Claim (Form-31, 19, 10C & 10D).
4. Choose the withdrawal option (full EPF settlement, partial withdrawal, or pension withdrawal).
5. Select the purpose for withdrawal and the amount needed. Submit the form with your Aadhaar OTP.

EPF Withdrawal Taxability:

Tax-free withdrawal

If you have contributed to the EPF for five consecutive years, the withdrawal amount is tax-free.

Taxable withdrawal

If you have not contributed for five continuous years, the amount withdrawn becomes taxable.

If you withdraw your EPF amount before completing 5 years of service, and the amount exceeds Rs 50,000, TDS (Tax Deducted at Source) will be applicable:

• 10% TDS is deducted if PAN is provided.
• 30% TDS is deducted if no PAN is provided.

However, no TDS will be deducted if the employee submits Form 15G/15H or if the employee has completed 5 years of continuous service.

Documents Required for EPF Withdrawal:

1. UAN (Universal Account Number)
2. Bank account details
3. Identity and address proof
4. Cancelled cheque with IFSC code

How to Check EPF Withdrawal Status:

After submitting the withdrawal request, you can check the status of your claim:

1. Log in to the UAN portal.
2. Click on 'Online Services' and select 'Track Claim Status'.
3. Enter your reference number to track the status of your withdrawal request.

EPF Forms:

• Form 19: Used for full EPF settlement when leaving a job.
• Form 31: Used for partial withdrawal or advance against the EPF balance.

EPF Customer Care:

• Toll-free number: 14470
• Missed call for balance inquiry: 9966044425
• SMS for balance inquiry: EPFOHO UAN to 7738299899
• Email: employeefeedback@epfindia.gov.in

Entering Exit Date for PF Withdrawal:

Previously, only the employer could enter the exit date in the EPFO records. Now, employees can also enter the date of exit from their previous employer on the UAN portal. To do so:

1. Log in to the UAN portal.
2. Go to 'Manage' > 'Mark Exit'.
3. Select the employer and enter the exit date as mentioned in your resignation or separation letter.

In conclusion, EPF is a valuable retirement tool that ensures financial security for employees’ post-retirement. While the withdrawal process has been simplified both online and offline, it’s essential to understand the conditions under which withdrawals are allowed and the tax implications that might apply. Proper management of your EPF and timely withdrawals can help you secure your financial future.