EPF funds or Employees’ Provident Fund provides retirement benefits to private and public sector employees. Employees contribute 12% amount of their basic salary along with dearness allowance. Moreover, employers also contribute 8.33% to Employee Pension Scheme and 3.67% to Employees’ Provident Fund.
Even though the primary objective of EPF funds is to serve as an employee’s retirement plan, individuals can withdraw PF online within their employment period. Accountholders can also withdraw funds after leaving a job. This happens when their PF balance doesn’t get transferred from the old employer to a new one.
It should be noted that if EPF is withdrawn before 5 years, then TDS will be applicable at a rate of 10% if the amount is more than Rs.50,000.
Here is some detailed information about EPF withdrawal.
EPF withdrawal process:
EPF withdrawal application can be made by two types of submission -
Two different forms are available to withdraw EPF funds by physical form submission -
New composite claim form (Aadhar)
By using the new composite claim form (Aadhar), you can withdraw funds without any such attestation of your employer. All you need to do is to fill-up the form and submit it to the jurisdictional office of EPFO.
New composite claim form (Non-Aadhar)
If you want to proceed with the new composite claim form (Non-Aadhaar), the authorisation of your employer is compulsory.
Self-certification by the accountholder is only required for partial withdrawals in both cases.
After withdrawal, you can invest your PF corpus in savings schemes like fixed deposits. Make sure you know the pros and cons of investing in FD before opting for the same.
EPFO also has an online procedure to help subscribers withdraw PF online. Nonetheless, there are some conditions that need to meet before availing the online process –
You must have already activated your Universal Account Number or UAN.
Your registered mobile number must be active.
KYC documents must be linked to your UAN.
To do that, you need to click on the “Manage” tab after logging in your EPF account. Next, click KYC to check whether the documents are linked and verified.
If you have already met these aforesaid conditions, you can proceed with the following steps –
As a first step, you have to open the online portal of EPFO.
After that, you can log in by providing your UAN and password.
Click on “Online Services”.
From the drop-down menu, you need to select Claim (Form-31, 19 and 10C).
A screen will appear with all the details of the member.
In the next step, you need to provide the last 4 digits of your bank account to authenticate.
Now, on “Yes” to accept the terms and conditions and proceed with the online process of claim.
Under “I Want to Apply for” tab you have to select the type of withdrawal you are opting for such as full or partial or pension withdrawal of PF online.
Owing to some service criteria, if you are not allowed to avail any of the above-said services, you need to select PF Advance (Form 31). Along with this, you also need to provide the purpose of your withdrawal, address, and amount.
Lastly, click the checkbox below and proceed with the submission.
If you are withdrawing your EPF funds after your retirement, you should also know where to invest in to plan your post-retirement life.
If you seek to reinvest your PF after retiring for more growth, you can opt for fixed deposits. There are several types of fixed deposit; opting for non-cumulative FDs will be beneficial for senior citizens and they can receive interest returns in multiple intervals.
Bajaj Finance is an NBFC that provides non-cumulative Fixed Deposits. Senior citizens can enjoy a lucrative rate of interest that can help their retirement corpus grow.
To sum it up, you can withdraw EPF funds entirely either after your retirement or if you are unemployed for more than 2 months. However, partial withdrawal can be done under circumstances like marriage, education, home renovation, etc. Also, it is preferable to withdraw PF online as this process is easier and less time-consuming.