Getting a job offer is one of the most exciting things ever. And landing a package with a significant hike is even more exciting. However, the only amount that you end up receiving every month is way less than you thought. And now you are wondering where the 20 to 25 % of your salary is going.
There are a lot of deductions companies make but a massive one is for EPF. If you work in an establishment with more than 20 people, both the employee and the employer are required to contribute 12% of the employee's basic salary to the EPF account. Over time, these contributions accumulate and grow into substantial funds by the time of retirement.
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There are a lot of rules surrounding the withdrawal of funds from EPF. So, here are all the details you need to know about the withdrawal of your EPF.
Full Withdrawal of Provident Fund
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Upon reaching retirement, typically around 58. To complete this process, you must submit a final settlement application.
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If you have been unemployed for two months, you can make a full withdrawal from your EPF account.
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If you are 54 years or older, you can withdraw 90% of your EPF savings one year before your official retirement.
Partial Withdrawal of Provident Fund
Medical Emergencies: You can withdraw funds for medical treatment of yourself, your spouse, children, or parents in cases of serious illnesses such as cancer or heart conditions. The maximum withdrawal amount for this purpose is six months basic wages and DA, or your share with interest, whichever is lesser.
Education: You can withdraw funds to cover educational expenses for yourself or your children after matriculation. You can withdraw up to 50% of your own contributions, along with the accrued interest.
Marriage: For your marriage, or the marriage of your siblings or children, you can withdraw up to 50% of your contribution with interest. This benefit can be used up to three times during your career.
Home Purchase or Construction: You can withdraw up to 90% of your EPF balance for the purpose of purchasing or building a house. This option is available only once during your EPF membership and is subject to certain conditions, such as completing at least three years of continuous service. The property must be registered in your name or jointly with your spouse, and it cannot be sold for at least five years from the date of acquisition.
Home Renovation: You can withdraw an amount equivalent to 12 months basic salary plus dearness allowance, or the total amount of your contributions with interest, whichever is lower, for home renovation or improvement. This option is available twice: once after five years from the completion of the house and again after ten years.
EPF Withdrawal Rules
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You can't withdraw your Provident Fund (PF) while you're still employed.
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If unemployed for one month, you can withdraw 75% of your PF balance, and the remaining 25% if unemployment lasts two months or more.
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If you withdraw Rs 50,000 or more within five years, a TDS of 10% applies with a valid PAN card or 30% without one.
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You can take a loan against your PF savings only after a certain period of employment.
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When changing jobs, there's no need to withdraw your old PF balance; it can be transferred easily if your Universal Account Number (UAN) is active and forms are submitted.
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You can withdraw your entire PF balance if you are unemployed for at least two months or if your new job starts more than two months after leaving your last one.
Online Withdrawal Process
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Login with your Universal Account Number (UAN) and password.
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Confirm your KYC details.
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Go to the ‘Online Services’ section and select ‘Claim (Form-31, 19 & 10C)’.
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Enter the last four digits of your bank account number to verify it.
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Choose the type of withdrawal you wish to make and pick the reason for your withdrawal.
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Submit the form and upload any required documents. Required Documents can change from a case by case basis. However, the standard documents include identity and address proof, a cancelled cheque and your bank account information.
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Once your employer approves the claim, the EPF amount will be transferred to your bank account. You will receive an SMS notification once the claim is processed.
Offline Withdrawal Process
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Complete the claim form.
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If you are using the Non-Aadhaar form, you will need your employer’s attestation.
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Submit the completed form along with any required documents to the appropriate EPFO office.
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The EPFO office will process your claim, and the amount will be deposited into your bank account.
Conclusion
The EPF scheme provides various withdrawal options to suit different life situations, like medical emergencies, education, and home purchases. The online withdrawal process is streamlined and efficient as it helps you to make withdrawals timely.
To get more details and support, you should visit the official EPFO website or seek advice from financial experts to navigate your EPF withdrawals.
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