Rules for withdrawal of money from Provident Fund Account

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Once you have discontinued service under employment, there are two things that you can do with your Provident Fund Account,

  1. If you are taking up employment in another company then you can transfer your existing Provident Fund Account to the new employer.
  2. If you do not plan to go under employment again then you can withdraw the funds lying in your Provident Fund Account.

In this article we will cover how to withdraw the funds lying in your Provident Fund Account.

How to Withdraw Money from Provident Fund?

For withdrawal of money from the provident fund, the first thing you need to check is whether your Provident Fund account is opened with the Employees’ Provident Fund Organization or with the company’s PF trust.

In case, your account is with the company’s PF trust then you need to contact your HR for the withdrawal process.

For withdrawal from the Government EPFO you can read below,

Withdrawal of PF Money from Govt. EPFO

Withdrawal of funds from Provident Fund Account can be of two types,

  1. Partial Withdrawal
  2. Complete Withdrawal

Let’s check each of them in detail,

Partial Withdrawal from Employee Provident Fund

Partial withdrawal can be done from the Employee Provident Fund only for certain specified reasons. Every reason has certain conditions that has to be met for facilitating the withdrawal.

The table given below states the reasons and the conditions for withdrawal.

PF withdrawal reason Minimum service PF Withdrawal Limit
House Construction or purchase of plot for self, spouse or joint 3 years 90% of PF balance
Home Loan Repayment of self, spouse or joint 3 years 90% of PF balance
House renovation or alteration of self, spouse or joint 5 years from completion of house 12 times of the basic salary or employee share with interest (whichever is lower)
Marriage of self, siblings and children 7 years 50% of PF balance
Medical treatment of self, parents, spouse and children Not required 6 times of his or her monthly salary or total corpus (whichever is lower)

Apart from the above mentioned the other reasons for partial withdrawal can be made are,

  • Lockout or closure of factory
  • Post Matriculation education of children
  • Natural calamity
  • Cut in electricity in establishment
  • Purchasing equipment by physically handicapped
  • One year before retirement
  • Investment in Varistha Pension Bima Yojana

If you have any of the above reasons for partial withdrawal then by following the condition on the terms of service you can withdraw from your Provident Fund account.

Complete Withdrawal from the Employee Provident Fund

If you wish to withdraw the entire amount from your Provident Fund account then your termination should be on the account of any of the reasons given below,

  1. Termination on account of ill health
  2. Contraction /Discontinuation of employer’s business
  3. Other cause beyond the control of the member
  4. Personal Reasons
  5. Marriage (for female member)
  6. Permanent Settlement Abroad

If you meet any of the above criteria then you can withdraw the entire amount from your Provident Fund Account along with it, there’s an added condition that 2 months should have passed since you left employment or you have retired from employment at the age of 58 years.

However, you can withdraw 90% of the corpus just one year before the retirement i.e at the age of 57 years.

Now comes the question of number of years of continuous employment. This is necessary for two reasons,

1. To check the withdrawal of your money in the EPS account.

If you have been in continuous employment for less than 10 years, then the money contributed towards your EPS account be withdrawn. But if you have been in service for more than 10 months then you cannot withdraw from your EPS account.

2. To determine the taxability on withdrawal.

If you have been in continuous employment for less than 5 years then the entire amount withdrawn along with interest from the account will become taxable. If you have in continuous employment for more than 5 years then the entire amount is tax-free. (Recommended Read: Tax on withdrawl from Employee Provident Fund)

Procedure for Withdraw of Money from Provident Fund

There are two ways that you can withdraw money, i.e.

  1. Online
  2. Offline

Online:

You would be required to furnish the following information for complete/partial settlement from your Provident Fund Account:-

1. UAN number

It is a unique ID attached to your Provident Fund account which will be given to you by your employer. If you haven’t been allotted a UAN number then you can visit this link to get one. Remember to keep your Aadhaar number (should be linked with your mobile number) and your Provident Fund number handy to get the UAN number.

2. Aadhar Number

To make an online claim it is mandatory to link your Aadhaar number with your Provident Fund account through the EPFO website. The Aadhaar number should be linked to your registered mobile number as you will receive OTP on this number.

3. Bank Account

It is mandatory to link your Bank Account with your EPF account to claim your Provident Fund account money. In this account you will receive the money. To link the bank account, you need your bank account number and IFSC code.

4. PAN Number

If you are withdrawing less than Rs. 50,000 then PAN is not mandatory but if you are withdrawing more than Rs. 50,000 then we need to check the number of years of continuous employment.

If you are withdrawing money before 5 years of continuous employment then it is mandatory that you furnish your PAN account number since you are subject to TDS deduction. If you are withdrawing from your Provident Fund account after 5 years of continuous employment then it is not mandatory furnish your PAN details.

The above mentioned are the essential details that you need to link with your account on the EPFO website to make an online claim.

You can apply online for your partial/full settlement by following the steps given below,

  1. Visit the EPFO website
  2. Click on the “Online Claims Member Transfer Account” or to reach directly click here.
  3. Enter your UAN number, Password and the Captcha code displayed on the screen.
  4. Then click on the “Manage” tab.
  5. Then enter the details to link your Bank Account, PAN (if applicable), and Aadhaar Number by submitting the relevant details.
  6. Then verify the Aadhar Number using the OTP.
  7. Then click on “Online Services”.
  8. Under the Online Services click “Claim”
  9. Fill out the relevant details, authenticate with Aadhaar and submit.

Offline

You can make a claim offline with or without using Aadhaar. The forms for both of them are different.

You can apply for offline by following the steps given below,

  1. Download the forms here.
  2. Fill out the form with relevant details.
  3. Get the form attested by your previous employer if you do not have a Aadhaar Card.
  4. Submit the form to the EPFO office in your city.

How much time does it take for the settlement of claims?

Earlier the time period for settlement of claim was 20 days due to physical forms. Now the EPFO has reduced the time period to 10 days upon online application. Therefore, to claim the money faster it is advised to make an online application

You can also track your claim by following the given below steps,

  • Visit the EPFO website
  • Click on the “Online Claims Member Transfer Account” or to reach directly click here.
  • Enter your UAN number, Password and the Captcha code displayed on the screen.
  • Then click on “Online Services”.
  • Under the Online Services click “Track Claim Status”

Karan is CA by Qualification with the rare distinction of being awarded All India Rank 22. He is also the founder of this website and loves to help people with their Tax Queries.