PF Withdrawal Rules 2022
The Employees’ Provident Fund Organization (EPFO) has revised several of its rules regarding withdrawal from the Provident Fund (PF) account in 2021. These revisions aim to provide easier access to their PF funds to subscribers who are facing financial difficulties due to the coronavirus pandemic. According to the new rules, PF account holders can withdraw money equivalent to three months of their basic salary plus dearness allowance or 75% of the net balance in their PF or EPF account, whichever is lower. This will be taken as a non-refundable deposit. These withdrawal claims can be raised online. Online claims are stipulated to be settled within 3 working days while offline claims can take up to 20 days for settlement.
| Reasons | Eligibility | Withdrawal Limit |
|---|---|---|
| Housing Loan for construction or addition of house/purchase of site/flat | Minimum 60 months of service | Up to to 36 months of his/her basic along with DA/ the total of employee and employer shares with interest/ the total cost of the house |
| Marriage of self/son/daughter/brother/sister or for post matriculation education of children | Minimum 84 months of service | Up to 50% from the EPF account |
| One year before retirement | Should be above 54 years of age | Up to 90% of his/her EPF amount |
| Medical expenses/Natural Calamity/purchase of equipment by physically handicapped/closure of factory/cut in electricity in establishment | No minimum service tenure | Up to 6 months of his/her basic and DA/ the entire contribution |
Employees’ Provident Fund (EPF) employees can withdraw their Provident Fund (PF) balance online easily. This can be done through the member e-SEWA portal of EPFO. According to ClearTax, the employees need to contribute 12 per cent of their basic pay per month to the EPF account
The employees can withdraw their complete savings in the PF once they retire. However, they can withdraw a partial amount if they meet certain criteria.
Points To Remember For PF Withdrawal
Linking Aadhar With UAN: It is mandatory to link the Aadhaar card with the UAN in order to deposit money to the PF account. The linking can be done online via the EPFO portal or UMANG App, according to a report by The Financial Express (FE).
KYC Process: The government has also made mandatory to withdraw funds in the first five years of the service. For KYC, a PAN card is necessary for KYC. The EPFO, after completing the process, will change the status of the account to ‘verified’.
New EPF Withdrawal Rules 2022
The EPF account consists of contributions from the employer and employee. However, the money in an EPF account cannot be withdrawn on a whim.
Here are 10 important rules about EPF withdrawal:
- Money from the EPF account cannot be withdrawn during employment, unlike a bank account. EPF is a long-term retirement savings scheme. The money can be withdrawn only after retirement.
- Partial withdrawal from EPF accounts is permitted in the case of an emergency such as medical emergency, house purchase or construction, and higher education. Partial withdrawal is subject to limits depending on the reason. The account holder can request online for partial withdrawal.
- Although the EPF corpus can be withdrawn only after retirement, early retirement is not considered until the person reaches 55 years of age. EPFO allows withdrawal of 90% of the EPF corpus 1 year before retirement, provided the person is not less than 54 years old.
- The EPF corpus can be withdrawn if a person faces unemployment before retirement due to lock-down or retrenchment.
- The EPF subscriber has to declare unemployment in order to withdraw the EPF amount.
- As per the new rule, EPFO allows withdrawal of 75% of the EPF corpus after 1 month of unemployment. The remaining 25% can be transferred to a new EPF account after gaining new employment.
- As per the old rule, 100% EPF withdrawal is allowed after 2 months of unemployment.
- EPF corpus withdrawal is exempted from tax but under certain conditions. Tax exemption on EPF corpus is permitted only if an employee contributes to the EPF account for 5 continuous years. The EPF amount is taxable if there is a break in the contribution to the account for 5 continuous years. In that case, the entire EPF amount will be considered as taxable income for that financial year.
- Tax is deducted at source on premature withdrawal of the EPF corpus. However, if the entire amount is less than Rs.50,000, then TDS is not applicable. Keep in mind, if an employee provides PAN with the application, the applicable TDS rate is 10%. Otherwise, it is 30% plus tax. Form 15H/15G is a declaration form, which states that a person’s total income is not taxable and thus, TDS is avoidable.
- An employee does not have to await approval from the employer for EPF withdrawal anymore. It can be done directly from the EPFO, provided the employee’s UAN and Aadhaar are linked, and the employer has approved it. EPF withdrawal status can be checked online.
A Step-by-Step Guide For PF Withdrawal
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- Visit the UAN portal at https://unifiedportal-mem.epfindia.gov.in/memberinterface/
- Log in using your UAN and password and Enter the captcha for verification.
- Now go to the ‘Online Services’ tab and select the option ‘Claim (Form-31, 19 & 10C)’ from the drop-down menu.
- Enter your bank account number on the next screen and click on ‘Verify’.
- Now click on ‘Yes’ and proceed.
- After this, click on ‘Proceed for Online Claim’.
- In the claim form, select the claim you require under the tab ‘I Want To Apply For’.
- Select ‘PF Advance (Form 31)’ to withdraw your fund. Then provide the purpose of such advance, the amount required and the employee’s address.
- Now, click on the certificate and submit your application.
- You may be asked to submit scanned documents for the purpose you have filled the form.
- After the employer approves the withdrawal request, you will receive money in your bank account. It usually takes 15-20 days to get the money credited to the bank account.