How to Withdraw and Transfer your Provident Fund Money

Provident fund (PF) or employee provident fund (EPF) is a popular government of India run scheme, which functions as a useful social security net for individuals employed with eligible organizations. Under the scheme, the employees contribute around 12% of their basic pay plus dearness allowance towards the EPF pool on a monthly basis. A corresponding amount is contributed by the employer. The returns are recalibrated by the union government periodically and currently provide a decent 8.65% per annum for FY2018-19.

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Thus, over a period of time, the cumulative contributions result in a corpus that can provide monetary support during the retirement years. While PF is a very sound investment, in times of extreme emergency, however, the amount could be withdrawn, prior to retirement as well, subject to certain conditions. We shall look at the situations under which an employee can withdraw and transfer the EPF.

To facilitate smooth portability of employee EPF records, the EPFO mechanism functions with the help of universal account number (UAN). Allotment of UAN to the employee is mandatory, whereby the UAN would be linked to the employee’s EPF account.

Details about EPF Withdrawal

One has the option to withdraw EPF completely or partially. But any withdrawal of EPF before five years of continuous employment attracts tax. The following are the situations under which EPF can be withdrawn.

• Complete withdrawal of EPF is permitted under the following situations:

a. Upon retirement from employment

b. In the event that an individual remains unemployed for a period of two months or more, withdrawal is subject to attestation by a gazetted officer.

• Partial withdrawal of EPF is allowed in the following circumstances, subject to stipulated conditions, with self-attestation facility:

a. Marriage: For the purpose of marriage of self, son/daughter and siblings i.e. brother/sister

• Ceiling on withdrawal limit: Upto 50% of the employee’s contribution towards EPF

• Minimum number of years in service: This facility can be availed in case of at least 7 years in employment

b. Education: Towards funding education for self (i.e. employee) or his/her children post completion of class 10

• Ceiling on withdrawal limit: Upto 50% of the employee’s contribution towards EPF

• Minimum number of years in service: This facility can be availed in case of at least 7 years in employment

c. Acquisition of land or house property or construction of house property: The capital asset should be owned by either the employee, the employee’s spouse or owned jointly

Eligible withdrawal amount:

• Asset is land – Ceiling limit is up to 24 times the sum of monthly wages and Dearness allowance

• Asset is house property – Ceiling limit is up to 36 times the sum of monthly wages and Dearness allowance

• Minimum number of years in service: This facility can be availed in case of at least 5 years in employment

d. Repayment of home loan: Partial EPF withdrawal is subject to fulfilling following conditions

• The said property should be registered in the name of either the employee, the employee’s spouse or in joint name

• The employee would have to submit relevant documents to the EPFO, validating housing loan availed

• The cumulative amount in the employee’s EPF, either singly or along with the spouse, including the interest component should exceed Rs20,000

• Ceiling on withdrawal limit: Up to 90% of the cumulative contribution of employee and employer towards EPF

• Minimum number of years in service: This facility can be availed in case of at least 10 years in employment

e. House renovation: The concerned property should be registered in the name of either the employee, the employee’s spouse or in joint name

• Ceiling on withdrawal limit: Up to 12 times the monthly wages earned

• Minimum number of years in service: This facility can be availed in case of at least 5 years in employment

f. Upon reaching 57 years of age:

• Ceiling on withdrawal limit: Up to 90% of the available amount, including interest

Withdrawal procedure: The employee can either submit a physical form or submit an online application.

Steps involved in case of submission of physical form:

Aadhaar based: The employee needs to submit the composite claim form (Aadhaar) at the regional EPFO office. This does not need attestation by the employer.

Non-Aadhaar based: The employee needs to submit the composite claim form (non- Aadhaar) at the regional EPFO office, along with employer attestation.

Steps involved for online submission of form

• This is facilitated by withdrawal of EPF online through the EPF website. The following are the prerequisites for smooth EPF withdrawal and elimination of the need for employer attestation:

• It is mandatory that the UAN is activated with a valid registered mobile number.

• UAN needs to be linked to one’s KYC along with one’s bank account.

Broadly the steps include:

• Logging into the EPFO website using one’s UAN and password.

• Following this, one needs to access the Claim section in the Online services tab.

• Upon selection of Proceed for online claim, one needs to fill in the claim form.

• Under this, the employee would need to select either of the 3 options in I Want to Apply for tab: full EPF Settlement, EPF Part withdrawal (loan/advance) or pension withdrawal.

• In case being ineligible, the options would not be displayed in the drop-down menu

• Submit the form

Details about EPF Transfer

In case of a job change, it is advisable to transfer the EPF balance to the current employer. The following are the prerequisites for smooth EPF transfer:

• Approval of e-KYC by employer

• The previous or current employer should have registered authorized signatories in the EPFO

• The EPF A/c no of previous as well as current employment should be entered in the EPFO portal

• A single transfer request against the previous member ID would be accepted

• Broadly the steps comprise

• Logging into the EPFO website using one’s UAN and password.

• Following this, one needs to access the one member – one EPF account (transfer request) in the online services tab.

• Verification of current employment details

• Selection of either previous or current employer for claim form attestation

• Validate with OTP based approval of UAN

• Upon receipt of the form via the unified EPFO interface, the employer would digitally approve the EPF transfer request

• Print the form 13 i.e. transfer claim form and submit within 10 days to the selected employer

These are the procedures involved and the situations under which, one is permitted to withdraw and transfer the EPF. However, it must be remembered that the EPF is a useful tool to build a sizeable corpus towards one’s retirement years. Further, the corpus is protected and interest as well as accumulated corpus is tax-free, PF should form a core part of your fixed income investments and so withdrawal should be avoided, to the extent possible.