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The PF (Provident Fund) is a savings plan based on employee and employer contributions, created to meet post-retirement financial needs. The employee can access or withdraw the accumulated fund, subject to specific withdrawal regulations.
The Employees’ Provident Fund (EPF) is a long-term financial arrangement formed through contributions from the employee, employer, and sometimes the government.
In India, the Employee Provident Fund is overseen by the statutory organisation known as the Employees’ Provident Fund Organisation. It acts as a form of social security that ensures financial security during retirement.
Eligibility for PF Withdrawal Process Online
The eligibility criteria for PF withdrawal online are outlined below:
The employee must serve the month's notice or an equivalent sum must be given to the employer.
The employee must update the personal information on the EPFO portal.
The employee is required to serve continuous employment at the current job for a minimum of two months.
Procedure for PF Withdrawal After Resignation
The overview of the procedure for withdrawing PF funds after resignation is given below:
Submission of Form 19: Initiate the PF withdrawal process by submitting Form 19 to your current employer.
This form can be obtained from the EPFO website or the nearest EPFO office. Sign the form and provide it to your current employer, along with a cancelled check or a bank passbook.
Transfer of PF Account: If you have changed jobs and hold multiple PF accounts, you can consolidate them by transferring your previous account balance to the current one. Complete this transfer by submitting Form 13 to your current employer.
Approval of Withdrawal Request: After submission, your current employer will review the details and approve the withdrawal request. This approval process may take up to 20 days from the date of submission.
Receipt of PF Withdrawal Amount: Once your withdrawal request receives approval, the accumulated PF balance will be credited to your bank account. This payment may take up to 30 days from the date of approval.
Tax Consequences of Withdrawing Provident Fund (PF) Funds Following Resignation
When a person opts to withdraw their PF after resigning, they must understand the associated tax implications. Let's explore the tax regulations for PF withdrawals based on the duration of an employee's service:
Tax Rules for Service Less Than 5 Years: If an employee has worked for less than five years, the PF withdrawal will not be subject to tax deductions.
Tax Rules for Service More Than 5 Years: For employees with more than five years of service, the PF withdrawal becomes liable to tax deductions. If the employee has not completed five years of service, a Tax Deducted at Source (TDS) of 10% will apply.
However, if the employee has worked for more than five years and provided their PAN details during withdrawal, the TDS rate remains at 10%. In cases where the PAN details are not furnished, the TDS rate rises to 34.608%.
You must note that the TDS deducted is not the final tax liability for the employee. The ultimate tax liability depends on their income tax slab for the financial year.
How to Withdraw PF After Leaving the Job
Step 1: Visit the official EPFO portal and log in by entering your UAN and password.
Step 2: Navigate to the 'Online Services' section and select the 'Claim' option from the drop-down menu.
Step 3: Upon redirection, input your bank account number and click 'Verify.'
Step 4: Confirm by clicking 'Yes' and choose 'Proceed with Online Claim.'
Step 5: Under the 'I want to Apply for' category, pick the type of withdrawal claim you wish to apply for.
Step 6: Opt for the 'PF Advance' form, provide the reason for your EPF withdrawal, and submit your application. You may be required to submit supporting documents for verification.
Step 7: Following approval, the PF amount will be deposited into your bank account.
What are the Documents Needed for EPF Withdrawal?
The following documents may be necessary to initiate a PF withdrawal:
Universal Account Number (UAN)
Proof of identity and address
Bank account details
A cancelled check with the IFSC code and account number
How to Check Your PF Withdrawal Status Online?
Step 1: Navigate to the EPFO official website. Select 'Services' and then choose 'For Employees.'
Step 2: Opt for 'Know Your Claim Status.'
Step 3: Click on the provided link, which will direct you to the member passbook application.
Step 4: Access your account by entering your Universal Account Number (UAN), password, and captcha.
Step 5: You will now see the 'View Claim Status' option. Click on it to check your claim status.
Final Words
The Employees’ Provident Fund (EPF) is a retirement fund offering guaranteed returns and tax advantages. Nevertheless, withdrawing your EPF balance before completing the mandatory five years of continuous service can diminish your retirement benefits.
Furthermore, your forthcoming EPF contributions will be affected since the withdrawn amount becomes subject to taxation.
However, you can guarantee the financial well-being of both yourself and your partner with a Retirement Plan that offers security during unexpected financial crises. These plans offer a financial cushion for your retirement, offering stability during your post-working years.
