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EPF is a mandatory pension scheme for professionals of private and public sector companies with 20 or more employees. It is a part of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 and is managed by the Employees’ Provident Fund Organisation (EPFO).
The amount of money needed after retirement can vary depending on a person's lifestyle, fixed commitments, and health. Employee Provident Fund (EPF) plays a vital role during your retirement. The money in the provident fund can be used to purchase an annuity or taken as a lump sum when the employee retires.
Let us understand the EPF withdrawal process in detail.
Who is Eligible to Withdraw Contribution from EPF?
12% of an employee’s dearness allowance and basic salary goes toward their EPF. This is equally contributed by the employer as well. Although, employees generally withdraw the corpus post retirement, they still have the option to withdraw it in case of emergencies. But is there any eligibility to withdraw the contribution that should be met by the employee?
Listed below are the eligibility criteria for withdrawing EPF:
- Before 1 year of retirement, an employee can withdraw 90% of their corpus.
- After 1 month of unemployment, an employee can withdraw 75% of the corpus and the remaining corpus will be transferred to the new EPF post getting re-employed.
- Employees should have an active UAN and their bank details must be linked to their UAN including AADHAR and PAN.
Documents Required to Withdraw EPF
To withdraw EPF, you need to submit the following listed documents:
- An attested copy of the applicant’s KYC documents, which can be any one of the following- Aadhar Card, Voter ID, Passport, or Driving License.
- A cancelled cheque or updated bank passbook or any other document that can be used to verify the applicant’s bank account details.
- ITR Form 2 and ITR Form 3 are required if the employee withdraws the EPF before 5 years of continuous employment.
- Bank account statement
- Revenue stamps if you will opt to receive the amount in your bank account.
- A duly filled EPF claim form.
When can EPF be Withdrawn?
An employee cannot withdraw their EPF contribution as and when they want. There are certain situations under which EPF withdrawal is allowed.
| Conditions Allowed for EPF Withdrawal | Tenure of the Employee’s Service | Limitations (If Any) |
|---|---|---|
| Buying or construction of a house | Continuous service of 5 years | Only the PF account holder or their spouse can apply for withdrawal. |
| Medical emergency | - | PF account holder, their parents, spouse or children can apply. |
| Repayment of home loan | Continuous service of 3 years | Only the PF account holder or their spouse can apply. |
| Home renovation | Continuous service of 5 years from the date of completion of the construction | Only the PF account holder or their spouse can apply. |
| Wedding | Continuous service of 7 years | Only the PF account holder, their siblings, and/or their children can apply for withdrawal. |
What is the Limit of EPF Withdrawal?
If you decide to withdraw from your EPF account before your retirement, there are certain limitations. During certain exigencies, you will be allowed to withdraw some portion of the EPF. Only after retirement, you will be able to withdraw the entire corpus.
Below is the EPF withdrawal limit on certain situations:
| Situations when you can Withdraw EPF | EPF Withdrawal Limit |
|---|---|
| Medical Emergency | 6 times the current monthly salary, or total corpus – whichever is lower |
| Wedding | 50% of the total EPF contributed till date |
| Repayment of Home Loan | Up to 90% of the EPF contribution |
| Home Renovation | 12 times the current monthly salary |
| Unemployment or Job Loss |
- 75% of the EPF contribution after 1 month of unemployment - 25% of the EPF contribution after 2 months of unemployment |
| Retirement | Total corpus |
How to Withdraw Employee Provident Fund (EPF)?
Employee Provident Fund (EPF) can be withdrawn both online and offline. However, you can only choose the online mode of EPF withdrawal if your AADHAR is linked to your UAN.
Let us discuss about both the processes of withdrawal – offline and online.
How to Withdraw EPF Offline?
Step 1: Download the composite claim form (AADHAR or Non-AADHAR) by visiting the EPF website.
Step 2: Users who are applying through the Composite Claim Form need to provide their bank account details and link their AADHAR number with their primary account number.
Note: The activation will be done through the portal.
Step 3: Users who are applying through the Composite Claim Form (Non-AADHAR) need not do the AADHAR seeding.
Step 4: Submit the form to the jurisdictional EPF Office post filling the details.
How to Withdraw EPF Online?
Step 1: Visit the member e-Sewa portal and log in with your UAN and password.
Step 2: Choose a claim form available under the “Online Services” option.
Step 3: Provide the bank account number linked with your UAN and verify the details.
Step 4: Click on “Proceed for Online Claim” and select the reason from the drop-down list.
Step 5: Provide your address and select “Get AADHAR OTP”.
Step 6: The online claim form will be submitted once you enter the OTP that you would have received on your mobile number.
Benefits of Withdrawing EPF Online
Withdrawing your EPF contribution online has a lot of benefits. Listed below are two benefits of withdrawing your EPF online:
-
Less Processing Time
-
Easy Withdrawal Process
Within 15-20 days of application, the amount that you have claimed will be credited to your bank account.
As the entire process is online, you do not have to step out the comfort of your home. Also, less paperwork is involved when you apply for it online. Additionally, you do not have to visit your previous employer for verification.
Can you Withdraw EPF Contribution Without AADHAAR Card?
Yes. You can withdraw your EPF contribution without an AADHAAR card, but you will need to provide your PAN number, bank account number, and IFSC code to do so.
- You may provide your PF number or the UAN
- Fill out the Composite Claim Form and mention the PF number
- Submit your PAN (Permanent Account Number)
- Form 15G or 15H-2 copies are to be attached. This applies if you have not worked for that employer for the preceding five years.
How to Withdraw EPF for a Deceased Person?
If an individual has passed away during the tenure of their service, the nominee can make a claim. The procedure for claiming the EPF contribution of the deceased person, the nominee has/have to follow the below-mentioned steps:
Step 1: Nominee has to visit the EPF website and choose “Death Claim Filing by Beneficiary” option.
Step 2: Enter the details such as UAN, name of the nominee, their date of birth, AADHAR details of the nominee.
Step 3: Click on “Authorised Pin” and an OTP will be sent to the registered mobile number of the nominee.
Step 4: Once the OTP has been entered, the death claim can be filed by the nominee.
Taxation Rules on EPF Withdrawal
The portion of salary that is contributed towards EPF is completely tax-free. However, whenever you withdraw an amount from your EPF, it is liable for tax deduction. The amount of tax that will be deducted depends on the service tenure of the employee at the time of withdrawal.
Below is a detailed table on the taxation rules of withdrawing EPF:
| EPF Withdrawal Condition | Taxation Rules |
|---|---|
| Withdrawal of more than Rs. 50,000 before completing 5 years of continuous service |
10% TDS is applicable if PAN is provided. Or else, 30% TDS plus tax will be applicable. If you provide Form 15G/15H, no TDS will be deducted. |
| Withdrawal of EPF after completing 5 years of continuous service | TDS is not applicable |
| Transferring funds from EPF to NPS | TDS is not applicable |
| Withdrawal of EPF when the employee doesn’t have 5 years of continuous service | Entire EPF amount is taxable |
Apart from the above taxation rules, there are a few more conditions of taxation on EPF. The salary of an employee in the year they withdraw the EPF decides the actual tax that the employee will be liable to pay. Also, if an employee’s salary is not taxable, they will have to fill Form 15G/15H.
FAQs Related to EPF Withdrawal Process
The time taken for the claims to be cleared depends on the mode of application chosen by the applicant. If the applicant has claimed for the withdrawal online, it may take up to 3 working days. However, with an offline mode of application, the settlement may take up to 20 days.
Yes. You can increase the amount that you are contributing towards your EPF up to 100% of your basic pay. But such contribution goes to Voluntary Provident Fund (VPF).
Withdrawing EPF before retirement comes with certain restrictions.
Below mentioned are a few conditions when you can withdraw EPF along with the number of times you can withdraw it:
| Withdrawal Conditions | Number of Times you can Withdraw EPF |
|---|---|
| Marriage | 3 Times |
| Buy a land/Construction of house | 1 Time |
| Medical emergency | No defined limit |
| Funding post-matriculation education | 3 Times |
No. You no longer need your employer’s permission for partial or complete withdrawal from your EPF corpus.
