Income Tax

PF Withdrawal – How to Withdraw PF Amount Online?

The PF (Provident Plan) is considered to be the saving plan that includes employee as well as employer contributions towards future benefits that help to meet post-retirement monetary needs. The employee has also been empowered to access or even PF withdrawal of the amount that has been accumulated, which is subject to specific withdrawal regulations. The Employees Provident Fund (EPF) can also be considered for long-term financial planning that can be contributed by both employer and employee and the government, too, sometimes in case. The statutory body that regulates the Provident Fund of employees in India is the Employees Provident Fund Organisation. This statutory body acts to facilitate social security, which ensures financial security during the retirement period.

Cases where the online PF withdrawal is possible even before the lock-in period

As has already been discussed, the Provident Fund (PF) can be a great instrument for retirement, but it has attached the list of withdrawal rules. The Employees Provident Fund (EPF) can be a statement fund that has been structured for the employees and employer to contribute towards PF during the employment period of the employee. Online PF withdrawal should not be taken during the lock-n period, but in certain cases, specific scenarios will lead to withdrawing the PF amount online.

There are the following ways below for the PF withdrawal before the lock-in period:

Unemployed for two months

There are rules given under EPF (Employees Provident Fund) to withdraw money from the total investments of PF in case of emergency if an individual has been unemployed for two months. PF withdrawal can also be helpful for those who have been suffering a financial loss during their unemployment period. But it can mean that PF withdrawal should happen in that situation. Therefore, it can be an excellent decision to keep the PM amount untouched until and unless there is some dire need for the funds if the employment has been planned.

In case of medical emergencies

A medical emergency can also be a very unforeseen situation, but PF can rescue your financial needs. The EMF rules can be very helpful to allow for PF withdrawal in case of a medical emergency. The PF not only provides the individual with medical help but also assists their parent, spouse, and children with medical help.

For buying a new house

For any individual to buy a new big is a kind of dream that comes true in anyone’s life, and it is a financially tiring job. However, your PF fund might also assist you throughout your journey in this situation. After you have worked for five years straight, you can use your online PF withdrawal to build or buy a new home. This does not have to be the time you spent at your most recent job; instead, it is the entire time you worked after joining EPF. Additionally, the individual can withdraw up to 90% of their PF amount by this rule. Both employer and employee contributions are paramount.

Cases where the PF withdrawal happens after the resignation from employment

There are the following ways below for PF withdrawal after the resignation from employment:

1. There has to be submission of Form-19 to initiate the PF withdrawal process to the employer. This Form has to be obtained from the EPFO portal or the nearest EPFO office. The individual should sign the Form and give it to the employer accompanied by the bank passbook or cancelled check.
2. There is a transfer of the PF account if an individual has been switching jobs and holding multiple PF accounts. The multiple PF accounts can be consolidated by transferring the previous balance amount to the recent one. The transfer can be completed by submitting Form-13 to the current employer.
3.  The most recent job, where the employee is joining, will analyze the information and grant the PF withdrawal request. Therefore, the employee must obtain consent from the employer for the request. For the employee who has been requesting to submit the PF withdrawal for this whole process to be completed, it will take around 20 days from the date of request.
4. The PF balance will be credited back to the employee’s bank account as soon as the employer receives the request for the PF withdrawal. The whole process of up to 30 days will pass once the PF withdrawal is approved.

There are also some consequences attached to tax-related matters after the resignation process. Whenever any individual requests a PF withdrawal after resigning from the previous employment, there are some taxes associated with the PF withdrawal amount that has been received by the employee. These are the following below about the taxation attached to the PF withdrawal:

1. It will apply to those employees who have served for less than 5 years. In this case, no tax will be deducted from the PF withdrawal.
2. It will apply to those employees who have worked in service for more than 5 years; then, in this case, tax in the Form of TDS (Tax Deducted at the Source) will apply to the PF withdrawal ranges of 10% applicable to those who have submitted it with the PAN details during the PF withdrawal process where the individual who has not submitted PAN details during the PF withdrawal process, the tax will range up to 34.4%.

Procedure to be followed for online PF withdrawal

Any employee who is looking for the PF withdrawal online then first has to activate the UAN (Universal Account Number) with other credentials that have to be linked with the KYC (Know your customer) details like AADHAR and PAN card details. There are certain steps below that have to be followed by the individual during the online PF withdrawal process:

1. The individual first has to log in to the EPFO portal with credentials like UAN no and password
2. Now, the individual has to click on the online services from the top menu button
3. The other screen will open and show the last four-digit number of the individual’s bank account to verify. Click on the verify button.
4. The certificate of undertaking has to be signed by the individual by clicking on the yes button.
5. Then, the individual needs to navigate to the PF advance (Form-13) for the online PF withdrawal.
6. The details that have been filled in should be verified once by the individual after clicking on the tick mark on the certificate. Now, finally, the individual should submit an EPF withdrawal application.
7. Now, it is the employer’s responsibility to approve the online withdrawal of PF.

There are also certain sets of people who are not comfortable filing offline the PF withdrawal process. Those people need to visit the EPFO office in their jurisdiction and submit the composite claim form to the duly assigned authority. There can be two types of composite claim forms: one can be AADHAR type, and the other one is non-AADHAR type. The first one does not require attestation from the employer, while the other one requires attestation from the employer that has been done before submission in the EPFO office.

Eligibility criteria for the online PF withdrawal

There are the following eligibility criteria have been made by the EPFO rules below-

1. There will be no permissibility to that individual either partially or fully unless that individual has been employed.
2. There could be a permissible limit to the PF withdrawal of up to 75% if the individual is unemployed for a period of up to 1 month and for the remaining balance amount if the individual is unemployed for a period of up to 2 months.
3. There could also be a chance of getting loan approval from the banks against the PF amount only when the individual is in service for a certain period.
4. There could be the possibility that the individual has been withdrawing more than 50,000 INR or more from the corpus fund of the EPF account within 5 years from the opening of the PF account. But there are certain charges levied in the Form of TDS of the total of 10% (with PAN card) and around 30% on those who do not have PAN.
5. There is a possibility that the individual cannot be prevented from paying the TDS amount by presenting Form-15G or 15H.

Necessary papers to apply for PF withdrawal

It has been noted that certain eligibility criteria have been made to procure PF withdrawal amounts for any individual who is applying for the PF withdrawal. The next should be all necessary documentation needed to be done while procuring the PF amount.

There is a list of documents below for the individual who has been applying for the PF withdrawal:

1. There has to be an attested copy of KYC (either PAN or AADHAR) details, or can the Driver’s license or Passport which can be required to be submitted
2. There will be the requirement of the ITR Form-2 and also ITR Form-3 if the employee has been applying prior to the 5-year continuous course of employment.
3. There should be the submission of the cancelled cheque or even the updated passbook or can be any other details for verifying the bank account details.
4. The PF claim form has to be filled out properly.
5. The applicant’s bank account statement has to be there.
6. There has to be a requirement for revenue stamps if the individual wants to receive the money back in his account.

Types of PF withdrawal provided under EPF rules

There are also certain types of withdrawals that require filing the process of PF withdrawal. These types of withdrawal are mentioned below:

1. Full PF withdrawal can be made by the individual, but it is only available for those who fulfil the eligibility criteria under certain compliances like retirement, permanent migration to a foreign country, or have been unemployed for 2 months.
2. Partial withdrawals can be permitted for a few specific purposes while the employee is still employed for reasons such as medical emergencies, education expenditures, and home loan repayments.
3.  There can be PF withdrawal if the employee needs advances for renovation or restructuring of the house; only partial withdrawal is available.
4. Individuals can apply for loans from their PF account in the event of a health-related crisis or disease, either for themselves, their life partner, kids, or ward guardians based on advance for illness.
5. There can be the possibility of individuals losing their employment for more than one month; it can be applied as non-refundable advances from their PF withdrawal account.

Certain ways to avoid PF claim rejection

There are certain ways to avoid making any mistakes while filing a PF claim rejection. There are certain key points below have been discussed to overcome the mistakes:

1. Avoid mismatch in the date of birth of any individual that has to prevent the PF withdrawal claim rejection. It has to be matched up with the records of AADAHR or can also be checked through the EPFO records.
2. Avoid the incomplete KYC details in the PF records, which can lead to the rejection of the PF withdrawal claim. It is always better to check the KYC details before claiming the PF withdrawal.
3. Avoid any errors in fetching the bank account details before the filing of the PF withdrawal claims in case of incorrect IFSC code, branch name, or other bank account details. Suppose there is any change in the IFSC or any other details because of the bank merger process; this would have to be updated in the EPFO records before filing any PF withdrawal process.
4. Avoid any mismatch in the name of the individual. If in case any change happens in the name, it has to be updated in the EPFO records as mentioned on the AADHAR. The process for the submission of the correct one is providing the joint declaration along with the PF withdrawal claim as per the EPFO records.
5. It is better to avoid the claim of the PF withdrawal with the joint bank account details, but the PF withdrawal is possible only when the joint bank account is with the spouse of the individual; the PF withdrawal can be credited to the individual joint account or the joint account bank that is withheld with the spouse.

Conclusion

Online Provident Fund (PF) withdrawals provide recipients with efficiency, transparency, and ease. By following the steps described in this tutorial, people can easily browse the online platform and quickly access their PF money. Using digital solutions simplifies the withdrawal process and supports government efforts to create a more digitally connected and accessible financial system. Online PF withdrawals are a testament to the successful fusion of convenience and financial empowerment as technology advances, which ultimately helps workers who want to access their assets when they need them. With the advancement in technology, the financial arena has changed its dynamics. Online PF withdrawal can be a better tool for facilitating financial services and allowing individuals to effectively manage their lifetime savings with their needs and aspirations.

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