From PF withdrawal to online claim, employed people should know the new and important rules of EPFO.

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For crores of salaried employees working in the private and organized sector, the PF (Provident Fund) account of the Employees' Provident Fund Organization (EPFO) is their biggest lifetime savings and the basis of social security. Every month, 12 percent of the employee's basic salary (Basic Salary + DA) and the same amount is deposited in the EPF and EPS account by the company.

However, when it comes to withdrawing money from PF account in case of emergency, illness, children's education, marriage or buying a house, many employees are not aware of the rules and forms. Claims often get rejected due to technical glitches or selection of wrong form. Let us know the complete ABCD related to EPFO's online claim, advance withdrawal, auto-settlement and tax.

Major types of PF withdrawal under EPFO

Withdrawal of money from EPF account is mainly divided into two categories:

  • Partial/Advance Withdrawal: Withdrawal of a fixed portion of PF fund for any specific need (like treatment, marriage, education, house construction) while continuing in job.

  • Full & Final Settlement: One-time settlement of entire EPF and pension fund after leaving job, being unemployed for more than 2 months or retiring after completing 58 years of age.

Under what circumstances can advance PF be withdrawn while working?

Keeping in mind the financial needs of the employees, EPFO ​​allows withdrawal of advance for various emergencies:

  • Serious illness or medical emergency: Advance can be withdrawn without any minimum service condition for serious medical treatment of the employee, spouse, children or parents. The withdrawal limit for medical emergencies has now been increased to ₹1,00,000 under auto-mode claims, which is processed in 3 to 4 days.

  • Marriage: For the marriage of self, brother-sister or son-daughter, an employee can withdraw up to 50 per cent of his/her contribution (including interest) on completion of minimum 7 years of total service.

  • Higher Education (Post-Matric Education): Withdrawal of 50% of your share is possible for children after 10th for higher education (after 7 years of service).

  • Purchase or construction of house: On completion of 5 years of continuous service, a large amount can be withdrawn as per the rules for purchasing a house or flat, land or construction.

  • Home Loan Prepayment: PF balance can also be used to repay registered housing loan after 3 years of service.

Which form is for whom? Understand the difference between Form 19, 10C and 31

It is most important to choose the correct form while filing online claim on EPFO's Member Seva Portal (UAN Portal):

  • Form 31: For any kind of partial withdrawal or advance (Advance PF) during employment, only Form 31 is filled.

  • Form 19: Form 19 is used for final settlement of the entire PF fund after leaving the job (with a minimum gap of 2 months).

  • Form 10C: If your total service is less than 10 years and you have left the job, then Form 10C is filled to withdraw the Pension Fund (EPS) amount. (Note: There is no pension withdrawal if there is more than 10 years of service, rather a scheme certificate is issued for monthly pension after the age of 58 years).

  • Form 10D: Form 10D is submitted to start regular monthly pension after completion of 58 years of age.

Auto-mode claim settlement: Money will come to the account in 3 to 4 days

EPFO has upgraded its IT system to implement 'Auto-Mode Settlement' system for several advance claim categories (especially medical, education and marriage).

If your UAN is fully activated, Aadhaar and PAN card are verified and the bank account is linked to NPCI, then the computer software checks the claim and credits the money directly into the employee's bank account within 72 to 96 hours without any human intervention.

TDS rule on PF withdrawal before 5 years

It is very important to keep in mind the tax rules while making PF withdrawal:

  • After 5 years of continuous service: If your total employment (whether in one company or multiple companies by transferring PF from the old company) has completed 5 years, then the entire amount withdrawn is 100% tax-free.

  • Withdrawal on less than 5 years of service: If total service is less than 5 years and withdrawal amount is more than ₹50,000, when PAN card is linked 10% TDS Will be cut. If PAN card is not linked, huge tax can be deducted at the maximum limit rate (about 34.6%).

  • Form 15G/15H: If your total annual income is less than the taxable limit, you can upload Form 15G (15H for senior citizens) along with the claim to avoid TDS deduction.

Step-by-step process to claim PF online

  1. Visit the EPFO's Unified Member Portal (unifiedportal-mem.epfindia.gov.in) and log in by entering your 12 digit UAN number, password and captcha.

  2. First of all, go to 'Manage' tab and check 'KYC' section whether your Aadhaar, PAN and bank account (including IFSC) is in 'Approved' status or not.

  3. Click on 'Online Services' in the top menu and from the dropdown 'Claim (Form-31, 19, 10C & 10D)' Select.

  4. 'Verify' by entering your linked bank account number on the screen and tick the terms and conditions.

  5. Click on 'Proceed for Online Claim' and select the claim option as per your requirement (like PF Advance Form 31 or Full Withdrawal).

  6. Enter the reason for withdrawal, the amount required and your residential address. Also upload a clean copy of bank passbook or canceled cheque.

  7. Click on 'Get Aadhaar OTP'. Submit the claim by entering the OTP received on the registered mobile number linked to Aadhaar.

While changing jobs, it is always advised to transfer the old PF balance online to the PF account of the new company. This not only ensures continuity of service resulting in 5 years of tax benefits, but also keeps the compound interest on your retirement fund growing seamlessly.

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