How to Close a PF Account Permanently?

Can you close a PF account online? Closing a PF account permanently is possible only under certain specific circumstances. Let us find out when and how to permanently close a PF account.

Employee Provident Fund or Provident Fund is one of the most popular savings schemes that allows an employee to financially secure their retirement period by making regular contributions from their salary throughout the course of their employment. Although an EPF account remains active until retirement age, there are specific situations under which an individual can close their PF account.

In this blog, we will discuss how to permanently close a PF account and withdraw the accumulated funds online.

In certain cases, a person may wish to close the account of the Provident Fund (PF) permanently. This typically occurs when a person leaves their profession or is out of work for a certain length of time or has a desire to move overseas. If so, the balance of the PF can be used to make cash available. But, it's crucial to know the long-term consequences of closing before making the decision. One can also learn about other related matters like the rules of PF withdrawal, PF balance transfer, pension benefits under EPS to take an informed decision.

One can close the PF account permanently by following the points mentioned below:

Check your eligibility

PF can be closed and the balance withdrawn in general, when the person has retired, become unemployed for the prescribed period or when the person fulfills other prescribed conditions of regulations for PF.

Ensure KYC details are updated

Check that your details like Aadhaar, PAN, bank account information, and others are properly matched with your UAN. Changes in the records prevent delays in the claim process.

Submit a PF withdrawal claim

Log in to EPFO member portal and file the required EPFO withdrawal form. Make sure all necessary information is correct before the request is submitted.

Upload required documents

Supporting documents may be required for withdrawal depending on the reason for withdrawal. Have ID, bank information and other relevant documents in hand.

Track the claim status

Once submitted, you can check the status of withdrawal requests on the EPFO website. Once approved, the money is deposited in the registered bank account.

Yes. Here’s the process to permanently close the PF account online.

• Online closure is linked to withdrawal
  PF accounts are normally linked to the member's UAN. A bank account is not necessarily "closed" even though you can withdraw the available balance online.
• Use the EPFO member portal
  Withdrawals can be claimed online via EPFO portal with verified KYC, without visiting EPFO office.
• Complete the Aadhaar-linked verification
  The seamless integration of the Aadhaar with the UAN simplifies claim submission online, streamlines the paperwork and reduces processing time.
• Tracking status online
  EPFO portal enables members to track claim status and get updates about the withdrawal process.

If you are withdrawing your PF amount due to a job change, there are certain terms and conditions you need to follow. These are as follows:

• Service period of 10 years: If your age is between 50-58 and you have completed 10 years of continuous service in your company, you are eligible to claim an early withdrawal. In this scenario, you need to fill out Form 10D and Composite Claim Form.
• Service period over 10 years: If you have completed more than 10 years of service but are less than 58 years of age, then you are not eligible to withdraw your EPS (Employee Pension Scheme) amount. You will only receive the pension after your retirement.
• Service period less than 10 years: If you have not completed 10 years of service with a company, you can claim both PF and EPS sum. In this case, you need to fill out the “Composite Claim Form” and opt for “Final PF Balance.”
• Age 58 and above: If your age is 58 years or more, you can withdraw your entire EPF amount and can also claim EPS by submitting Form 10D.

The process of final EPF settlement is simple and straightforward. You can do so online or offline based on your preferences. Let’s discuss how to close PF account permanently online.

Online PF withdrawal

Here is what you need to do:

• Go to the EPFO official website.
• Select Member UAN/Online Service (OCS/OTCP) option.
• Enter the required details, such as your UAN (Universal Account Number) and password. Fill in the captcha and click on “Sign in.”
• Navigate to the “Online Services” option from the menu and click on “Claim (Form-31,19,10D & 10C)”.
• Enter the required details and select “Verify.”
• Click “Yes” to sign the “Certificate of Undertaking”.
• Next, select “Only PF withdrawal (Form 19)” from the drop-down list.
• Enter your correct address. Once done, check the disclaimer and select “Get Aadhaar OTP.” You will receive the Aadhaar OTP on your linked mobile number. Enter it to submit your application.
• A reference number will be generated on a successful submission of the withdrawal application. Copy this number for future reference.
• If done correctly, your complete PF amount will be reflected in your UAN-linked bank account.

Offline PF withdrawal

Here is everything you need to do for offline EPF withdrawal:

• Visit the official EPFO website and download the Composite Claim form.
• Fill out the form and submit it to the EPFO in your area. Note that you don’t need your employer’s attestation for the Aadhaar Composite Claim form. But for a non-Aadhaar form, you will need your employer’s attestation.

Below are the main documents required to make the final EPF withdrawal:

• EPF Close Account Form
• Bank account details
• One blank and cancelled cheque with the account number and IFSC code visible
• Identity Proof
• Address Proof

For online EPF withdrawal, no additional documents are required. But you must upload a clear scanned copy of your passbook on the EPFO portal. You must ensure that all the required bank details are visible on your uploaded document.

The following are the key considerations before closing your PR account.

Impact on retirement savings

By regularly investing in a PF account, one can create a retirement corpus with interest earned on the investment. Early withdrawal can decrease retirement savings supplies.

Tax implications

The tax implications of PF withdrawals will depend on the period of service and the applicable rules. It is recommended to check the new tax regulations before starting a withdrawal.

Effect on EPS benefits

Withdrawing or closing PF might mean it could affect your benefits under the Employee Pension Scheme (EPS). It's good to know the rules of pension eligibility to prevent future hassles.

Consider PF transfer instead

In addition to the drawback, it may be preferable to not take a withdrawal from the PF balance, but instead to transfer the balance to a new employer, which will ensure continuity of retirement savings in the event of a job change.

A significant number of members experience problems in PF withdrawal process because of documentation issues, lack of complete KYC details or claim rejection. Being aware of these challenges and planning accordingly can help ensure a smoother experience.

KYC details not updated

• Challenge: Claims may be delayed or rejected if Aadhaar, PAN, or bank details are not linked correctly.
• Solution: Verify and update all KYC information before submitting the withdrawal request.

Mismatch in personal information

• Challenge: Differences in name, date of birth, or other personal details across documents can lead to processing delays.
• Solution: Ensure that the information in EPFO records matches your official documents.

Claim rejection due to incorrect details

• Challenge: Errors in bank account numbers or claim forms can result in claim rejection.
• Solution: Carefully review all information before submission and rectify any discrepancies promptly.

Delay in processing

• Challenge: Some withdrawal requests may take longer than expected due to verification requirements.
• Solution: Regularly track the claim status online and contact EPFO if additional clarification is required.

Withdrawing or closing a PF account may be suitable in certain situations like retirement, long-term unemployment or moving overseas. While PF is important in establishing long-term financial security. However, it is important to understand the impact on retirement income, tax and pension benefits before a decision is made. Transitions to a new employer (where feasible) can help to retain retirement benefits, where possible, while maintaining continuity of savings. Knowing the rules and all paperwork requirements can make the withdrawal process more efficient and hassle free.