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  • PF Withdrawal

    Provident Fund Withdrawal

    A Provident Fund provides financial security for salaried employees after retirement. Provident Fund is part of the employee's salary that is deducted and added to the provident fund account every month. The employer would also contribute the same amount to the employee's pf account. The pf can be withdrawn once the employee has left the company. Government employees can get a lump sum after their retirement. In India, there are three types of provident funds, i.e., Public Provident Fund for the public, Employees Provident Fund (EPF) for private sector employees and General Provident Fund (GPF) for Government employees.

    A PPF account is available for fifteen years and after that withdrawals are permitted under strict regulations. Holders cannot withdraw any amount for the first six years. After that, 50% of the available balance can be withdrawn. PPF account holders cannot withdraw the entire amount before the end of the tenure. Once the fifteen year tenure is complete, the PPF account can be extended for another five years and going forward, the account can be closed or rolled over. If an individual has a GPF or EPF account, withdrawals are not allowed until the employee has quit or is self-employed. According to EPF regulations. The money can be withdrawn only if the holder does not have a job, while making the withdrawal. PF transfers are allowed if the holder changes jobs. If an employee chooses to make withdrawals after leaving a job, then a declaration has to be submitted with the reason for the withdrawal mentioned.

    Partial withdrawals are allowed in special cases in the form of a loan, where the account holder gives the following reasons - purchasing a house, education, marriage, medical expenses, etc. Partial withdrawals can be done only if the employee has completed seven years of service and the sum that is withdrawn should not be more that 50% of the contribution amount. Such withdrawals can be made only three times during an employee's employment tenure. Additionally, if the withdrawal is being made for a wedding or education then adequate proof has to be given. Withdrawals can be made for medical treatments, with the maximum amount allowed being six times the individual's basic salary. Though there is no restriction on meeting a requirement with regards to the number of employment years, the hospitalisation proof has to be submitted.

    Provident Fund withdrawals can be made for the following purposes -

    For purchasing a dwelling house or a flat / Construction of a house and purchase of a site for the same.

    • Pf withdrawals can be done for purchasing a house or a flat where the account holder's family would reside. Additionally, if the account holder wants to construct a house on a site bought from the State Government, Centre, co-operative society, trust, institution, local body or Housing Finance Corporation, withdrawals can be done.
    • Withdrawals can be done for purchasing a site for construction or for buying a built-in house from any individual or for purchasing a flat from any promoter.
    • PF withdrawals can be done for constructing a house on a vacant site owned by spouse or the account holder or for completing the construction of a house.

    Money withdrawn for buying sites on which houses will be constructed should not be more than the holder's basic salary and dearness allowance for a period of twenty four months. When withdrawals are done for purchasing ready-to-occupy flats or houses and for house constructions, the amount should not be more than the holder's basic salary and dearness allowance for a period of thirty six months. Withdrawals can be done only if the member's PF account is more than five years old, the member's contribution is more than Rs. 1000 and a declaration is got from the holder saying that the property that is being purchased is free of encumbrances and is in the name of the holder or the spouse. Withdrawals cannot be done for buying a share from a joint property or for construction of a house on a jointly owned site, except with spouse. When a withdrawal is granted for purchasing a dwelling house or a dwelling site, the money would not be paid to the holder, but the agency in multiple installments. When a withdrawal is sanctioned for dwelling house construction, the money would not paid to the holder in multiple installments. When a withdrawal is granted for purchasing a dwelling flat from a promoter, which is owned by the member, the money would be paid to the holder in multiple installments.

    Additional withdrawals can also be for an amount up to twelve months'' basic salary and dearness allowance to renovate and make improvements to existing houses. The dwelling house should be owned by the member or jointly with the spouse.

     

    Requirement

     

    Documents Required

    Purchase of sites for House Construction

    The PF account should be five years old, with a minimum balance of Rs. 1000.

    Form 31 to be submitted for making withdrawals.

    A declaration from the account holder quoting that the new property is free from any encumbrance and is registered in his/her name or the spouse's name.

    House Construction

    The PF account should be five years old, with a minimum balance of Rs. 1000.

    Form 31 to be submitted for making withdrawals.

    A declaration from the account holder quoting that the new property is free from any encumbrance and is registered in his/her name or the spouse's name.

    Purchase of Flats

    The PF account should be five years old, with a minimum balance of Rs. 1000.

    Form 31 to be submitted for making withdrawals.

    A declaration from the account holder quoting that the new property is free from any encumbrance and is registered in his/her name or the spouse's name.

    Renovation/ Improvements to Houses

    Five years after the house has been constructed.

    Form 31 to be submitted for making withdrawals.

     

    For Repayment of loans (on a case-by-case basis)

    Withdrawals will also be sanctioned for the partial or complete repayment of loans taken from nationalized banks, State Government, State Housing Board, registered co-operative society or Municipal Corporation. The loan availed should be in the name of the account holder or his/her spouse. The amount that is withdrawn should not exceed a sum equal to thirty six months' basic salary and dearness allowance or the total contributions of the employee and employer. Once the withdrawal request has been made, the payment will be made directly to the lender and not to the account holder.

     

    Requirement

     

    Documents Required

    Advances taken for loan repayments

    The PF account should be ten years old. The loan should have been availed from a Government institution.

    Form 31 to be submitted for making withdrawals.

    The account holder has to provide a certificate from the lender with the complete loan details, outstanding amount and repayments.

    For purchasing a dwelling house or a flat / Construction of a house inclusive of a site owned by the account holder

    For acquiring a house or a flat and for constructing a house along with the purchase of a site pf withdrawals can be done by account holder. For making such withdrawals, the pf account has to be five years old and the minimum balance in the account should be atleast Rs. 20,000. The amount will be sent directly to the Housing agency or Government agency in multiple installments.

    Grant of withdrawals for special cases

    An advance for an amount not exceeding the employee's contribution can be granted if the account holder remains without any employment for a period of more than fifteen days, when work units like industries or factories have been closed down. If an employee does not receive any wages for over two months for reasons other than strikes, a non-recoverable advance might be given to him/her. If the factories continue to remain shut for over six months, then another advance can be granted for up to 100% of the total contribution done by the employer along with the interest. The advances given will be interest free and will be recovered in monthly installments.

    Withdrawals for illness and hospitalisation

    A non-refundable advance will be given for hospitalisation for more than one month, major surgeries and to persons suffering from T.B, paralysis, mental derangement, cancer, leprosy or other heart ailments. The advance will be given if the employer states that the employee does not get any Employees' State Insurance Scheme benefits or if the doctor certifies that surgery or hospitalisation is mandatory. Account holders can also take advance for meeting major surgery expenses and illness treatments for their family members. A statement from the doctor and the account holder's employer is required. The advance amount that will be granted should not be more than six months' dearness allowance and basic salary or the employee's contribution amount, whichever is lesser.

     

    Requirement

     

    Documents Required

    Advances taken for Illness / Hospitalisation

    Hospitalisation should be for a month or more.

    Form 31 to be submitted for making withdrawals.

    The doctor has to give a certificate for the surgery or hospitalisation.

    Advances for education or marriages of children/siblings/self

    A non-refundable advance can be taken for the account holder's, children's or sibling's marriage or for education purposes. The amount that will be sanctioned should not be more that 50% of the employee's contribution. Account holders cannot take more than three advance amounts for these purposes.

     

    Requirement

     

    Documents Required

    Advances taken for Marriages / Education

    The PF account should be seven years old, with a minimum balance of Rs. 1000.

    Form 31 to be submitted for making withdrawals.

    The account holder has to submit a declaration with the employer's attestation.

    Advances applicable under abnormal conditions

    Advances will be granted to persons whose property has been damaged by calamities like floods, earthquakes and riots. The advance amount that would be given is Rs. 5000 or 50% of the employee's contribution amount with interest, whichever is less. Advances might not be sanctioned if the State has stated that the calamity has affected public areas, if certificates are got by the holder from unauthorised sources or the application is made within four months from the declaration date.

     

    Requirement

     

    Documents Required

    Advances taken under Abnormal Conditions

    Certificate from the correct authorities verifying the damage. Declaration of the State Government.

    Form 31 to be submitted for making withdrawals.

    Certificate from the recognized authorities.

    Advances given to persons affected by electricity cuts

    If electricity has been cut at a worksite where the person is employed, then a non-refundable advance might be given. The advance will be granted only if the wages for a month starting from January 1973 has been less that 3/4th or equal to 3/4th. The amount that will be sanctioned is Rs. 300 or the wage amount or the employee's total contribution amount. The State Government will not give any advance if electricity has been restored and the employer give a certificate stating that the pay drop was due to the electricity cut.

     

    Requirement

     

    Documents Required

    Advances taken by persons affected by electricity cuts

    The advance will be granted only if the wages for a month starting from January 1973 has been less that 3/4th or equal to 3/4th.

    Form 31 to be submitted for making withdrawals.

    State Government's Certificate about the electricity cut.

    Advances given to physically-handicapped persons

    Any account holder who is physically handicapped can get an advance to purchase any equipment to aid him with his daily activities. The advance will be given only if the account holder has a medical certificate from a doctor stating that he is physically handicapped. The amount sanctioned here should not be more than six months' basic salary and dearness allowance or the employee's total contribution amount, whichever is lesser. Another advance amount will not be given within three years of availing the first advance amount. The Form 31 and the doctor's certificate have to be submitted for getting advances under this category.

    Withdrawals done a year before retirement

    PF account holders can withdraw up to 90% of the accrued amount after he/she reaches the age of 54 or before one year of retirement from the company, whichever is later.

    Withdrawals at the age of 55 for investing in Varishtha Pension Bima Yojana

    Provident fund account holders can withdraw up to 90% of the accrued amount after he/she reaches the age of 55 to invest in the Varishtha Pension Bima Yojana offered by the Life Insurance Corporation of India.

    Payments of advances and withdrawals

    The payment for any advance or withdrawal done by account holders is done through postal money orders, as deposits in the member's bank accounts or post office accounts or through the concerned employer.

    When are funds payable to a pf account holder?

    A Provident Fund member can withdraw the entire amount in his/her account under the following circumstances.

    • After retiring from current company, when the individual has turned 55.
    • If the account holder retires due to permanent/total mental or bodily incapacity as certified by a doctor.
    • Migrating to other countries from India for permanent relocation or taking up employment outside.
    • If service has been terminated due to individual or mass retrenchment.
    • In cases where, persons are transferred by an employer from one establishment to another, discharged and given retrenchment compensation or is suffering from a severe illness.
    • On death of an account holder, the amount is payable to a nominee. If there are no nominees then the amount will be distributed in equal shares to his/her family members.

    Make PF withdrawals online

    Soon, PF account holders will be able to use their Aadhaar cards to make pf withdrawals online. The Employees' Provident Fund Organisation (EPFO) is launching the online PF withdrawal feature by March 2016. Using the online platform, settlements will be done in just three hours. Any customer who wants to use the online pf withdrawal facility has to link his/her Aadhaar Card, Bank account and Unique) Account Numbers (UANs).

    Procedure to withdraw Provident Fund

    • Step 1 - Download Form 19 and Form 10C.
    • Step 2 - The filled in forms have to be submitted with a blank cheque.
    • Step 3 - If going through the employer, then submit the above mentioned documents to the employer.
    • Step 4 - If the withdrawal application is not being through the employer, then another method is to get attestation from the bank manager.
    • Step 5 - The completed/attested forms have to be sent to the regional PF office for further approvals.

    The regional PF office will take atleast a month to process the withdrawal application. The Employees' Provident Fund Organisation (EPFO) will credit the pf amount directly to the applicant's bank account.

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