PF Withdrawal Rules: All You Need to Know
EPF (Employees’ Provident Fund) is also known as PF (Provident Fund). It is a retirement plus savings scheme administered by the Employees’ Provident Fund Organisation (EPFO).
If your salary is less than ₹15,000 per month, your employer is statutorily required to open an EPF account for you. Organisations with 20 or more employees are also statutorily required to make contributions to the EPF.
Salaried employees and their employers contribute a certain amount each month to this contribution-based savings plan, which provides the employee with a monetary fund for their post-retirement needs. The EPF provides tax benefits and relatively higher interest rates than other saving schemes.
As per EPF rules, employees must contribute 12% of their base salaries to this fund. And the employer contributes the matching amount to the PF account. Annual interest is earned on the EPF account.
Upon retirement, you can withdraw your entire EPF account. The PF withdrawal rules may however allow for premature withdrawals under certain conditions.
New PF Withdrawal Rules 2022
In general, contributors can withdraw their PF once they have completed their service with a particular organisation. However, due to the pandemic, EPFO has revised several PF withdrawal rules to ease contributors’ financial burden.
Here are the new PF or EPF withdrawal rules for 2022 that you should know:
- It is possible to withdraw funds from your PF accounts in certain circumstances, such as unemployment, medical expenses, home purchases or renovations, marriage expenses, or higher education expenses. However, withdrawal limits are subject to PF withdrawal rules.
- When you switch jobs, you don’t need to withdraw your PF; you can transfer it to your new account.
- You can withdraw 90% of your PF after age 54.
- You can withdraw 75% of your PF after one month of unemployment. After securing new employment, you can transfer the remaining 25% of your fund to your newly opened PF account. Or, you can withdraw 100% after two months of unemployment.
- PF withdrawals are tax-free under certain conditions: It is mandatory to contribute to your PF account for five consecutive years, failing which you will have to pay tax for the year skipped.
- Premature withdrawal of PF corpus is subject to TDS unless it is less than ₹50,000. If you do not provide your PAN, you will have to pay 30% plus tax instead of 10%.
- If your UAN and Aadhaar are linked, you can withdraw funds directly from the EPFO without waiting for your employer’s approval.
How to Withdraw EPF
You can withdraw your PF by submitting a physical or online application. To use the online facility, you must have your UAN linked with your Aadhaar.
- Download the composite claim form. It comes in two types: Aadhaar and non-Aadhaar.
- Select the composite claim form (Aadhaar) if your UAN is active and your Aadhaar and bank details are linked on the UAN portal. If it’s not linked, choose the composite claim form (non-Aadhaar).
- The Aadhaar form does not require attestation from your employer, but the Non-Aadhaar form does before you submit it.
- Fill out and submit the form to the EPFO office in your jurisdiction.
Please ensure that your UAN is active and linked to your Aadhaar, PAN, and bank details to withdraw your PF online.
- Open the official website of EPFO.
- From the top menu, select ‘services’ and then click on ‘for employee’.
- Look for ‘member UAN/online services’ and click on it.
- Enter your UAN and password to access your EPF account.
- From the top menu, select ‘Manage’ and then select ‘KYC’ to ensure that the information you have entered is correct.
- After confirming your KYC, click the ‘online services’ tab, then select ‘claim (form 31, 19 & 10C)’.
- Verify your information on the page, input the last four digits of your registered bank account and click ‘verify’.
- Select ‘Yes’ to verify the online certificate of the undertaking.
- Then, select the ‘Proceed for Online Claim’ option.
- Under the ‘I want to apply for’ option, choose full EPF settlement, part EPF withdrawal, or pension withdrawal as needed.
- The form will open with a new section where you can select the ‘Purpose for which advance is required.’
- Enter the amount of advance required.
- Upload the scanned documents if required for approval. The funds will be deposited into your registered bank account once your employer approves your withdrawal request.
Types of EPF Withdrawals and Eligibility
As per the PF withdrawal rules, you are eligible for PF withdrawals under the following circumstances.
1. For Repaying Existing Home Loan
To pay a home loan, you can withdraw an amount equivalent to 36 times your monthly salary from your PF. You can use PF, either to purchase a house or to pay off your existing mortgage.
You are eligible to use this facility if you have contributed for at least 10 years to your PF account. The property must be in your name or jointly owned with your spouse. Furthermore, you are allowed to use this facility only once during your lifetime.
2. Purchase or Construction of a Residential Property
If you are planning to buy a new house or property, you can partially withdraw PF. However, there are certain conditions.
Home or property must be in your name, your spouse’s name, or jointly in both of your names. You are eligible to use this facility if you have completed five years of service. You can avail up to 24 times your monthly salary.
3. Marriage Expenses
- PF withdrawal rules allow you to withdraw 50% of your funds for marriage expenses.
- You can withdraw funds for your marriage or that of your children and siblings.
- A minimum of seven years of PF contributions are required to qualify for this facility.
4. For Medical Emergencies
- You can withdraw six months’ basic wage and dearness allowance from your PF balance for urgent medical treatment.
- You can use the funds for yourself or your family members.
5. For Education
- You can withdraw 50% of total contributions from your PF accounts to pursue higher education or to fund your children’s education from 10th grade onwards.
- To qualify for this facility, you need to have contributed to your PF account for at least seven years.
In case of unemployment, you can withdraw 75% of your PF fund after 1 month of unemployment. And after securing a new job, you can transfer the remaining 25% to your newly opened PF account. If you remain unemployed for more than two months, you can withdraw 100% of your fund.
- PF withdrawal rules allow you to withdraw 12 months’ basic salary and DA (dearness allowance) for home renovations or repairs. However, it must meet certain conditions.
- The house must be in your name, your spouse’s name, or jointly in both of your names. During your lifetime, you can use this facility twice. For your house to qualify, it must have been constructed or renovated more than five years ago.
- You are eligible to use this facility if you have completed five years of service.
8. For Specially-abled Individuals
Specially-abled account holders can withdraw up to six months of their basic pay, plus dearness allowance, or employee’s share with interest, whichever is less, to cover equipment costs.
The Documents You Need to Withdraw Your PF
You will need the following for PF withdrawal:
- Universal Account Number (UAN).
- Composite claim form.
- Two revenue stamps.
- Cancelled cheque (Make sure IFSC code and account number are visible).
- Bank account statement (The bank account should be in the name of the PF holder solely while the holder is alive).
- ITR Forms 2 and 3 (Only if you’re withdrawing before 5 years of continuous service).
- Identity proof issued by the government.
- Address proof.
Tax-Free Limit for PF Withdrawals
- Taxes are not applicable on PF withdrawals after five years of continuous service. However, this is subject to variation on account of tax bracket.
- TDS is applicable on premature withdrawals of PF corpus unless the withdrawal is less than ₹50,000. If you do not provide your PAN, you will have to pay 30% plus tax instead of 10%.
TDS is not applicable in the following circumstances:
- When withdrawing funds for medical emergencies or health issues.
- When withdrawing funds due to unemployment.
- When you transfer the PF balance to another PF account.
Avoid TDS with the following tips:
- You do not have to withdraw your PF account when changing jobs. You can transfer it instead.
- If you’re taking a career break, you don’t have to withdraw your PF account. You can earn interest on it for up to 3 years without contributing. However, you will have to pay tax on the interest.
- TDS is not applied to funds withdrawn after five years of service.
In comparison to other savings options, PF offers tax benefits and higher interest rates. As a retirement and savings scheme, it provides you with a monetary fund for your retirement.
You can withdraw PF partially or completely as per the PF withdrawal rules.
Unemployment or retirement allows a complete withdrawal of the money. It is also possible to partially withdraw your fund under exigencies after meeting certain conditions. You can withdraw your PF via a physical or online application.
Can I prematurely withdraw PF?
Partial early withdrawals from EPF are permitted to meet short-term needs.
When you reach the age of 54, you can withdraw 90% of your corpus, and when you reach the age of 55, you can withdraw 100%.
If you are unemployed for one month, you can withdraw 75% of the fund; the remaining 25% is withdrawable after another month.
If you meet certain requirements, you can partially withdraw PF funds for higher education, marriage, home purchases, and medical emergencies.
Will I need my employer’s permission to withdraw my PF amount?
According to the latest EPF amendments, you need not obtain permission from the employer before withdrawing your EPF amount.
If I contribute higher to my PF, will the employer also have to do so?
The employer will make a minimum contribution regardless of whether or not you join a voluntary provident fund.
How can I avoid TDS on withdrawal?
Follow these tips to avoid TDS:
You do not have to withdraw your PF account when changing jobs. Instead, you can transfer it to your new employer.
You do not have to withdraw your PF account when you take a career break. You can earn interest on it for up to three years without contributing. However, the interest will attract tax.
TDS is not applied to funds withdrawn after five years of service.
Can I get the PF passbook printed?
You can download and print your EPF Passbook online through the EPF website.
To download your passbook, follow these steps:
Look for the member passbook page on EPFO’s website.
Login into the member portal using your UAN and password.
Select your member ID to view the passbook.
It will open your passbook in printable PDF format.
What happens to my EPF account once I quit my job or switch jobs?
In case of a job switch, your existing PF account must be transferred to the new employer. This does not require closing the existing account and opening a new one.
If you want to take a break from your job, you can do so without withdrawing your PF account. You can earn interest on it without contributing for up to three years. However, interest earned on your PF account during your period of unemployment is taxable.