How To Withdraw PF: A Step-By-Step Simple To Follow Guide

At least once in their lifetime, every working professional asks this question: how to withdraw Provident Fund (PF)?

For a working professional or someone who has just got a job, it’s important that they know the answers to these three questions related to PF:

What is PF?
How to withdraw PF?
When to withdraw PF?

Employee Provident Fund (EPF) or popularly known as PF is a government scheme that comes under the Employee Provident Fund Act of 1952.

Under the EPF Act, it is mandatory for an employee to deposit at least 12% of their basic monthly salary in the PF account. The act also makes it compulsory for employers to match employees’ contribution to the PF account every month. It is to be noted that 3.7% of the employer’s contribution goes towards the provident fund component and the remaining 8.33% towards pension fund.

Employees can withdraw the money from their PF account either fully or partially depending on a few factors. Let’s see what these factors are and how to withdraw PF.

How to withdraw PF?

Employees’ PF accounts earn a fixed rate interest which changes every year. The current (2021-22) rate of interest is fixed at 8.1%. Today, withdrawal of PF money is totally digital and can be done from the EPFO website by clicking here.

However, there are a few things employees should be ready with before they decide to withdraw your PF.

UAN: The Ministry of Labour and Employment provides employees and employers each with a 12-digit Universal Account Number (UAN). Employees’ UAN remains the same irrespective of the number of jobs. Employees should know their UAN before applying to withdraw PF online.
Aadhar number: To withdraw the PF amount, it’s mandatory to link the Aadhar number with UAN.
Bank account: Upon successful completion of applying for PF withdrawal, the money is sent to the employee’s bank account. They should ensure that their bank account number is linked to the Aadhar number.
PF accounts: In case, employees have more than one PF account and want to withdraw the full PF amount, they should first merge all the PF accounts together.

Steps to withdraw PF online

Login: Visit the EPFO website and enter UAN, password, and the captcha code to login to the account. Employees can reset their password if they don’t remember it by providing Aadhar number and UAN. They will get an OTP on their mobile number registered with Aadhar. They just need to punch in the OTP and reset the password.
Claim PF: Upon logging, users will be shown a new page that will have the “Online Services” tab on top. From the dropdown menu, they need to click “CLAIM (Form-31 19, 10C & 10D). It will take them to a new page.
Verify details: The Online Claim form will show all the information of the employee. They will have to verify and provide their bank account number that is connected with their UAN.
Proceed to claim PF: After verifying the bank account number, they need to click the “Proceed For Online Claim” button at the bottom of the page.
Choose the type of PF withdrawal: The claim form will show all their details and would ask them to apply for the right type of PF withdrawals. From the dropdown menu next to the “I want to apply for” tab, they need to choose the most relevant option: EPF Settlement; EPF part-withdrawal, or pension withdrawal. If they are not eligible for any particular withdrawal, that option will not be shown.
Reason to withdraw PF: Partial withdrawal of PF or advance PF withdrawal is allowed only for certain reasons. From the dropdown menu, they need to select the reason for which they are applying to withdraw PF amount. Next step is to add a residential address and the PF amount to withdraw.
Submit: The last step is to submit the application online. Once all the information is verified, it will take 15-20 days for the PF money to be transferred to the bank account.

Employees can check the status of their PF withdrawal from this link. After logging in, they can check the PF withdrawal status as well as the passbook of their PF account.

Conditions to withdraw PF

There are three conditions under which employees can withdraw PF.

1. Retirement age

They can withdraw their full PF amount as well as the pension once they have reached the retirement age of 58 years.

2. Jobless

If they are less than 58 years old and have not had any jobs for at least 60 days, they can apply to withdraw their full PF amount. It makes sense to withdraw PF if they have no job for continuous 36 months, post which the PF account will become inactive.

3. Partial withdrawal

Instead of withdrawing the whole PF amount, employees can also withdraw a part of the PF corpus and leave the rest. They will have to state specific reasons and meet certain conditions to partially withdraw PF, which can be

Purchase of land
Loan repayment to buy or construct a house
Wedding in the family
Higher education of children
Illness of family members
Natural calamity
Purchase of equipment for physically handicapped employee

Employees also need to attach a scanned copy of a document that provides proof of the reason for withdrawal. To partially withdraw PF, they need to have at least five years of employment. The minimum requirement of years in service changes based on the reasons for PF withdrawal.

Frequently Asked Questions:

1. How can I check my PF balance?

Answer: Visit EPFO website and login to your account to check your PF balance. You can also check your PF balance by logging in to the Umang mobile application.

2. Is it possible to increase or decrease my PF contribution?

Answer: You will have to contribute 12% of their monthly salary towards PF. You can choose to increase the PF contribution. All such contributions will go towards the Voluntary Provident Fund (VPF) account. However, employers’ contribution will remain the same.

3. What do I do if I have more than one EPF account?

Answer: When you switch jobs, the new employer will most likely give you a new EPF account. However, all EPF accounts come under the unique 12-digit UAN assigned to you. You can easily merge all your EPF accounts into one through your UAN.

4. Will my EPF account continue to accrue interest when I quit my job and don’t withdraw?

Answer: For the first 36 months of leaving your job, your EPF account will continue earning interest. However, if there is any contribution to your account for 36 months, your account will become inoperative. You must apply to withdraw your PF before the 36 months period from the date of eligibility.

5. Do I have to pay taxes if I withdraw PF?

Answer: Interest earned up to Rs 2.5 lakh is tax free when you withdraw. You will be taxed on the amount exceeding Rs 2.5 lakh.

Conclusion

The Indian government has made PF as a mandatory way for salaried people to save for rainy days or when they retire. It is important that from time to time employees keep an eye on their EPF accounts by doing the following: