Get the PF withdrawal application processed through your previous employer:
Unlike the above two options, PF withdrawal can also be filed via your previous employer. Most companies will ask for a duly filled withdrawal form along with a blank cheque and will get your PF request processed via the EPF office. Getting in touch with your previous company’s HR manager is the best way to go about this.
Why Early PF Withdrawal Isn’t a Great Idea
PF amount is a corpus that you gradually build so as to ensure enough money on retirement. PF is a great financial instrument to help you save a little amount every month and that too at a great interest rate of 8.75% p.a. This interest earned on your PF account is tax-free (if withdrawn after 5 years of PF account opening). Keeping in mind all these benefits, PF amount withdrawal is not a great idea unless absolutely necessary.
In case you’re switching jobs, EPF should preferably be transferred rather than withdrawn.There are several reasons that make PF withdrawal not a very great option. A few reasons are listed below.
- PF amount is meant as your retirement corpus and should ideally not be touched before retirement. This fosters the habit of saving and makes life stress-free for employed individuals
- If you withdraw your PF amount within 5 years of opening the PF account, you will have to pay tax on the interest earned. Otherwise, interest on PF amounts is tax free under section 80C of the Income Tax Act
- You can easily transfer your PF account to your new company in case you switch your job
Withdrawing PF while you are employed is actually against the rulesProvident Fund is a fund that is made up of contributions by the employee and the employer for the respective period of employment. PF is an effective financial instrument to enable you generate enough corpus for post-retirement phase.
Generally, 12% of the basic monthly salary goes into your PF account while the same amount is contributed by your employer too. Your PF is essentially a corpus meant to be used after retirement; however, there are provisions which let you withdraw the PF amount earlier too.
- Explore all available Tax Saving Schemes
Situations When PF Withdrawal Becomes Difficult
Sunil left his first job 5 years ago but has still not withdrawn his PF amount. Last week when he decided to initiate the PF amount withdrawal process, he was surprised to know that the company had shut down. Sunil does not know how to obtain his PF amount which is now over Rs.2 Lacs.
Ashok had submitted his PF documents to his previous employer for withdrawal of PF amount. However, the employer kept the form as it is and did not do anything about it. It’s been 2 months and still Ashok could not get his ex-employer to start the PF withdrawal procedure for him.
The above two problems are just examples of situations wherein individuals might want to withdraw the amount in their PF accounts. However, not all of us are sure about the procedure involved.
Ways to Withdraw PF Amount:
Although withdrawal of PF isn’t allowed while you are still employed, there are ways to get this amount in case you need it badly. You can make this withdrawal in case you have switched your job and do not want to get your PF account transferred.
Form 19 which is available either with employers or can be downloaded from EPFI website, is to be filled and submitted for withdrawing the PF amount. Once the application is submitted to the regional EPF Office, the PF amount along with the interest earned is received by the applicant within three months from the date of application. Here are three different ways in which you can easily withdraw your PF sum.
- Apply for PF amount withdrawal via UAN that is Universal Account Number: If you have UAN then you can directly apply for pf withdrawal. You do not require your previous employer’s approval for getting this application processed. However, the only challenge with this option is that most employers do not share the UAN with employees and in the absence of UAN this option cannot be availed.
- Submit your PF withdrawal application directly to the regional PF Office: Get a PF withdrawal form, fill it and submit the same directly to the regional Provident Fund Office. This procedure requires identity attestation since the PF office would want to be sure whether the right person is applying for withdrawal. Hence, your withdrawal form needs to be attested by one of the following listed authorities –
- Any Bank Manager
- A Gazetted Officer
- Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public
Attestation by Bank Manager is best when the bank is where you maintain your account. Since this direct method of application has chances of fraud so EPF office generally asks for a letter stating the reason for direct application. Non-cooperation from employer is a valid reason but only if you have a proof for that. Also, attaching a proof of employment letter is a plus.
EPF withdrawal without employer signature
Trying to get a signature from your previous employer can be a quite a hassle if you have left your job on a bad note. Earlier, it was mandatory for employees to have the attestation of their employers to facilitate a withdrawal. Today, the EPFO has eased the process on realising how impractical the situation of having your employer’s signature to make a withdrawal can be. The introduction of the EPFO’s member portal and the UAN have eased all processes related to EPF, including making withdrawals. There are two steps to make a PF withdrawal without your employer’s signature: The first is with an Aadhaar card and the second is without an Aadhaar card.
With an Aadhaar card:
- To ease the process, the EPFO has a withdrawal option on its member portal just by linking your Aadhaar card. By linking your Aadhaar card, no attestation from your employer is required to carry out the process.
- The Aadhaar card and salary bank account should have been verified by your employer though, and the details embedded in the EPFO’s member portal.
- Next step is to make sure that your UAN is activated. Having these areas covered, you can now start the process of making a PF withdrawal without your employer’s signature.
- On the EPFO web portal, download the new EPF forms to make a withdrawal - Form 19, Form 31 and Form 10C.
- On these forms enter your name (as stated on your UAN, Aadhaar card and bank account), registered mobile number, address, PAN card number, reason for leaving and date of joining.
- Form 19 UAN is for making PF withdrawals.
- Form 10C UAN is for making withdrawals from your pension benefits.
- Attach a cancelled cheque for the EPFO to verify your bank account number. Next, submit the form and the cancelled cheque to the nearest EPF office.
- Note that your bank account number and the bank account number stated in UAN database should match. Also, your details mentioned in the form should match that on the UAN database. Any discrepancies with regard to the details could result in a disapproval to make a withdrawal from the EPFO.
Without an Aadhaar card:
- For those who do not have an Aadhaar card, the process of making a withdrawal without the employer’s signature can get tedious.
- Download the forms (Form 19, Form 31 and Form 10C) from the EPFO’s member portal.
- Next, fill in the details and get an attestation from a credible authority, such as - a Gazetted officer, magistrate, member of the EPFO, or manager of the bank you hold your salary account with.
- Make sure that you get a signature or stamp on every page of your form and verified bank details.
- To avoid cases of fraud, one will have to state reason for direct application of withdrawal. Stating ‘Non-cooperation’ from ex-employer is usually a good enough reason.
- Attach an indemnity bond with a 100 Rupee stamp paper.
- Attach copies of your payslips, appointment letter, Form 19, and your employee ID card.
- Lastly, attach a copy of your KYC documents - identity and address proof - before submitting all the forms at the EPF office.
PF joint declaration form
A PF joint declaration form is a form made between the employee and his/her employer when the total contribution towards PF is at a higher rate - in other words, when the total wages exceeds the wage ceiling limit of Rs.6,500 per month. The form can be accessed and downloaded from the EPFO’s member portal. Here are the steps required to fill the form before submission:
- Address the form to the regional PF commissioner.
- State your name and your employer’s name.
- Fill in your name, your father’s or husband’s name, PF account number, date of birth and lastly your date of joining and leaving.
- Next, attach a document of identification - either a copy of your Aadhaar card, PAN card, voters ID, Passport or driving license.
- Sign the form. You will then have to get the attestation of an authority and the establishment seal.
EPF login for employer
With the introduction of the EPFO’s member portal, making contributions towards an employee's PF account for the employer has become relaxed and easy. Employers first need to have their company registered on the EPFO’s member portal and then can make contributions, check transactions and balances, and attest claims by employees digitally. Listed are the steps required to login to an employer’s account using the EPFO’s member portal.
- The first thing is to register one’s company on the EPFO member portal. Log on to the EPFO site (http://esewa.epfoservices.in/choose_ofc_details.php), enter the state the company is situated in and the establishment code.
- Once the registration is done, an employer can now login to his/her account on the site - https://employerclaims.epfoservices.in/
- Next, enter the registered username and password and login to the account.
- From here, an employer can make contributions, digitally sign employee’s claims, check balances, transactions and so on.
EPF customer care
For those in need of contacting the EPFO for queries or grievances, the EPFO member portal has an option of accessing the contact number and email ID of the regional EPF office. In case of issues such as balance, refund and transfer discrepancies, the dedicated EPF customer care will take of any queries. In case of delays in transfer claims and so on, the customer care will update members on their customer toll free number, if in case their member portal is down. To find the customer care number, follow the steps:
- Visit the EPFO member portal - http://www.epfbng.kar.nic.in/
- Click on ‘contact us’ on the top bar.
- Check the toll free number of the EPF regional office and call to answer your queries by the EPFO.
EPF balance full statement
Back then, one could get their balance statement of the contributions they made the whole year at the beginning of each year. If there were corrections, the process was tedious. Thankfully, with the introduction of the EPFO’s member portal, checking one’s balance, accessing the full balance statement or downloading the PF passbook is just a few clicks away. Listed below are the steps required to check one’s full balance statement.
- Log on to the EPF balance page - http://www.epfindia.com/site_en/KYEPFB.php
- At the bottom of the page, click on the ‘know your balance’ tool button.
- The ‘member balance page’ will then prop up. Select the state where your PF account is held.
- Fill in your EPF account number, your registered mobile number and your name as stated in your EPF account.
- Click on ‘submit’. Next, an SMS stating your balance will be sent to your mobile number. You can check your full balance statement and download it if required. To download the statement, click on ‘download passbook’.
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News About Withdraw PF Amount
8.7% Interest on PF Deposits Approved by Government
For the year 2015-2016, the Ministry of Finance has The Finance Ministry has approved interest at the rate of 8.7 % on the Employees Provident Fund deposits, as opposed to 8.75%, the interest rate applicable for the previous year.
Earlier this year, the Ministry of Labour had issued a statement limiting 100% withdrawal of the Provident Fund by individuals who have been out of employment for a period of more than 2 months. In addition to the statement issued by the Ministry of Labour, the Employee Provident Fund Organization (EPFO) has also disallowed individuals to withdraw funds from the employee’s own contribution and interest earned on the same, if the claimant has been out of employment for more than 2 months.
As per the revised norms introduced earlier this year, individuals will not be permitted to withdraw their PF if they have reached 54 years of age. They can only withdraw their PF once they will have attained the age of 57 years. According to the previously applicable norms, PF subscribers or contributors could claim up to 90% of their accumulated PF amount at 54 years of age, while the final claims could be settled a year prior to their retirement.
3rd May 2016
New PF withdrawal rules scrapped by the Government.
The decision of Government of India to tighten the PF withdrawal rules has created discontent and violent protest in Bengaluru. Trade unions like Rashtriya Swayamsevak Sangh have protested against the government of one-sided decision of tightening the PF withdrawal norms. The notification was issued on 10th February to tighten the norms of PF withdrawal. However, it was again withdrawn yesterday when the majority of trade unions protested against it violently in Bengaluru. As per the new notification, the PF withdrawal age was extended to 58 years. Employees would be able to withdraw their EPF contributions only when they reach the age of 58.
26th April 2016
Withdrawal of PF under specific situations allowed by Labour Ministry
The Labour Ministry eased the restrictions imposed on employees’ withdrawing their provident fund in February, on Monday. Officials have confirmed that the provident fund corpus can be withdrawn only under certain circumstances such as housing, healthcare, education and marriage of children.
These norms will be in effect from August and was made after the labour minister, Bandaru Dattatreya met representatives of trade unions.
People who have joined a government organization or became members of an old age pension or contributory provident fund can also avail these benefits. Previously it had been announced that workers would be able to withdraw their corpus only after the age of 58.
25th April 2016
Delays Caused in Online EPF Withdrawals by Employers to be addressed
For those who have applied for online withdrawal of their provident fund but have yet to receive their money due to delays caused by the employers will soon breathe a sigh of relief.
The EPFO has directed their CPFC’s and RPFC’s or Central Provident Fund Commissioners and Regional Provident Fund Commissioners to personally intervene and sort out the grievances of subscribers who have been caused delays due to the employers who have failed to attest or verify the claim documents
The communication was sent out on 13th April 2016 and stated that there is a huge number of online claims that are lying pending with the employers for attestation and verification of member details and the communication has directed the CPFC’s and RPFC’s to intervene in the matter
21st April 2016
Full EPF Withdrawal Open Available Only for the Next 15 Days
EPFO has come out with a new set of rules that prevent people from making full withdrawals of their EPF starting from May 2016. This means that those who have been unemployed for two months and meet the criteria for full withdrawal of their EPF have only 15 more days to do so. If they fail to do so, then starting May, the withdrawal limit will be restricted and people will get access to their EPF only after turning 58 years of age
This rule change was brought about on February 10th 2016 with the Ministry of labour and employment making massive changes in the EPF rules. Effective May 1st, an employee can only make withdrawals from their own EPF contribution and the employer’s contribution and interest can be accessed after the employee turns 58 years of age
19th April 2016
EPF tax may come back if your salary is over Rs.1 lakh
If you are earning Rs. 1 lakh a month and more, you can be liable for tax, if an when you decided to withdraw from your EPF. This may be taxed. The government is looking to review their earlier proposal and have proposed that either 70% of an employer’s contribution is taxed or should be made mandatory saved in a taxable pension scheme. With EPF not being taxed now, and if an employee’s CTC for a year in Rs 1 crore, making his employer’s contribution to PF to Rs 12 lakh, which is tax fee and the government sees as unfair. The plan is to create a pension society, on which tax is always charged.
15th March 2016
Tax on EPF Withdrawal to be deferred after PM Steps in
11th March 2016: The plan to tax up to 60% of the employees provident fund withdrawal has come to a screeching halt after Prime Minister Narendra Modi’s intervention. The decision on the tax will be announced in the Lok Sabha on Tuesday by the Finance Minister, Arun Jaitley
The announcement was to come earlier on a Friday but due to the death of P.A Sangma, the Lok Sabha did not convene. The move which was widely criticised as regressive by the salaried middle class was asked to be put on hold by the P.M who felt the matter needed to be studied in detail by a committee
Initially the review was to look into the interest portion of the corpus but fearing that it may take away the good vibe of the budget, the P.M has asked for the entire proposal to be reviewed. Upon announcement of the decision, the hashtag #RollbackEPF was trending on twitter.
11th March 2016
Fix tax anomalies in annuity schemes IRDA tell FM
After the announcement that EPF will be taxed at the time of withdrawal, the taxation will be on 60% of the employee’s contribution. The announcement came in the Budget 2016-17 made by FM Arun Jaitley. This proposal has agitated the whole salaried class in the country, forcing the savers to move towards buying annuities. This provides yields lower than bonds of the government or tax-free bonds. The IRDA or the Insurance Regulatory and Development Authority of India has asked the government in a letter, highlighting some of the anomalies, that come in a way of insurance that come in the way of insurance companies. This definitely, comes in the way for companies offering better return on annuities.
10th March 2016
EPF tax proposal will be reviewed by the PMO
With the outburst of emotions, on the proposal to tax EPF withdrawals in the Budget 2016 . The PMO has decided to have a review on the proposal with top officials. The Union Labour and Employment Ministry, have made a very strong proposal to turn around this proposal. After the discussion on the Finance Bill in Parliament, Finance Minister Arun Jaitley said a final decision would be taken on the proposal
9th March 2016
Ministry Clarifies: Tax on PF Aims to Discourage Withdrawal
After the Union Budget 2016 announced that 60 percent of Employees Provident Fund (EPF) withdrawals will be subject to tax, the Finance Ministry has issued a clarification on the motive behind this move. It said the tax exemption to just 40 percent of the EPF withdrawal has been instituted with the objective of discouraging people from withdrawing their provident fund corpus.
The Ministry said it wants more people to invest towards pension security instead of withdrawing the whole PF money at retirement. It also said that if the EPF funds were reinvested in an annuity plan, the amount will not be subject to tax. Additionally, if the person who invests in an annuity plan dies, their heirs can withdraw the funds without paying tax.
8th March 2016