EPFO members cannot withdraw from their PF account until they are retired. However, in certain special circumstances, they are allowed to withdraw a part of the total amount in their EPF account. Therefore, if you are interested to know about the special conditions under which you can withdraw PF balance from your EPF account and how to carry out the process, this article is for you.
Conditions for EPF withdrawal
Withdrawing from an EPF account can be done quite easily using one common form. However, if you are thinking of withdrawing from your EPF account, you must be aware if you are eligible to do so. You can withdraw PF balance only on specific occasions under specific conditions, such as:
Marriage or education of your children, yourself or your siblings
- Minimum 7 years of service should be completed
- The maximum amount that can be withdrawn from EPF account is 50% of the till-date contribution. This can be availed for a maximum of 3 times only.
Repayment or partial repayment of a home loan in your name, your spouse’s name, or jointly owned by both
- Minimum 10 years of service should be completed
- The maximum amount that can be withdrawn is up to 36 times your basic salary
Alterations or repairs of an existing house owned by you or your spouse or jointly by both
- Minimum 5 years of service should be completed (10 years for repairs) after the house was constructed or bought
- Maximum amount that can be withdrawn is 12 times your basic salary and can be availed only once
Construction or buying a house or flat or land for yourself or spouse or jointly
- Minimum 5 years of service should be completed
- Maximum amount that can be withdrawn is 36 times your basic salary. For buying a plot, the amount is 24 times your salary. This can be availed only once
Medical treatment for yourself or your family (spouse, children, dependent parents)
- Withdrawing money is allowed for undergoing major surgery such as leprosy, cancer, heart illness, mental ailments, or even TB
- Maximum amount that can be withdrawn is 6 times your basic salary
- Age should be 57 years
- Maximum amount that can be withdrawn is 90% of the EPF balance including the interest
You can withdraw the full EPF amount under the following conditions only:
- You are retired from the workforce.
- You are not employed for 2 months or more.
Therefore, you can withdraw money from your EPF account only under the above-mentioned conditions.
Latest Update from EPFO:
In the light of the second wave of Covid-19 ravaging most of India, the EPFO has decided to aid EPF subscribers financially. They have now allowed its members to withdraw a second Covid-19 advance from their EPF accounts if they have already availed the first Covid-19 advance.
Therefore, the members can withdraw PF balance up to 75% of the total funds in their EPF account or extent of their basic wages and DA for three months, whichever is less. The provision for first Covid-19 advance withdrawal came about in March 2020 under Pradhan Mantri Garib Kalyan Yojana.
Composite Claim Form
Earlier, EPFO demanded separate documents like marriage invitation cards and utilisation certificates for EPF withdrawal. Fortunately, it has scrapped all these rules and now it can be done with just a single page Composite Claim Form (Aadhaar). This form now comes with self-certification.
The form signed by the EPF subscriber will be construed as ‘self-certification’ by EPFO and no additional documents will be required to be submitted. Even attestation of the claim form from your employer is not needed for the successful submission of the claim. When the withdrawal claim is accepted, the amount will be sent to your UAN linked bank account.
Process of how to withdraw PF balance
There are two ways to submit your claim to withdraw PF balance:
- Submitting an application for withdrawal in person.
- Submitting the withdrawal request online
Here, we will be providing you with a step-by-step process of submitting the claim form for EPF withdrawal online:
For submitting the request to withdraw PF balance online, make sure you have an activated UAN number. Once you have that, you need to go to the UAN e-Sewa portal and sign in using your UAN and password.
After logging in, you need to ensure that your KYC details are up to date. You can do this by clicking on the ‘Manage’ tab and then selecting the ‘KYC’ option.
Once you are done verifying your KYC details, click on the ‘Save’ button.
Then you need to go to the navigation bar and click on the ‘Online Services’ tab. From the dropdown, you need to select the ‘Claim’ option.
The claim form will be opened where you will have to verify the last four digits of your bank account number.
After verification of your account number, the following message will be displayed on your screen:
You need to select the ‘Yes’ button here and then click on the ‘Proceed for Online Claim’ option.
The next page will show you all the options available for you. You will need to go to the ‘I want to apply’ tab and then select your desired claim option, ‘full EPF Settlement/EPF part withdrawal/pension withdrawal, etc.
After this, you need to select the PF Advance (Form 31) and enter the amount you wish to withdraw from your EPF, your reason for withdrawal, and other details.
Lastly, you need to click on the Certificate for submitting the application.
The EPFO may ask you to submit scanned documents after you have submitted the application. Your employer will also need to authorise your request for EPF withdrawal to your bank account. This process including the verification and approval can take up to 20 days.
Tax on EPF withdrawal
The amount withdrawn from EPF account is liable to tax but it can be exempted from tax in certain conditions. Let’s take a look at the tax rules on EPF withdrawal:
- If the contribution period must be more than 5 years, the withdrawal is not liable to tax.
- The tax on your EPF withdrawal depends on your salary in the year of withdrawal.
- It is liable to TDS if the withdrawn amount is more than Rs. 50,000.
- TDS deducted will be 30% plus tax if the EPF account holder’s PAN details are not updated. If they are up to date, the TDS deducted is 10%.
- If your total income is not liable to tax, it is recommended for you to submit the Form 15H/15G as a declaration.
- If your PF fund has been transferred to NPS, you will not be required to pay tax on withdrawal amount.
- If you have claimed tax exemptions on EPF for Section 80C, you are not eligible for tax exemptions. You are liable to pay tax on employee’s contribution, employer’s contribution as well as interest on each deposit.
Advantages of EPF withdrawal online
Here is a list of advantages of submitting the EPF withdrawal application form online rather than offline:
- Easy processing of application
- Saves your time since you do not have to go to the EPFO office
- Processing takes much less time compared to offline
- Previous employer verification is not needed
Hence, we hope this guide helped you in obtaining all information you required to withdraw PF balance online. Now, you are ready to take an informed decision about your own withdrawal application. If you have any more questions about the withdrawal process, you can directly contact EPFOa experts on their Toll-Free Customer Care Number – 1800 118 005.