Provident Fund  Withdrawal Rules 2022 [Updated]

Provident Fund  Withdrawal Rules:

1. Employee Provident Fund is a compulsory saving plus retirement scheme. EPF comprises of two contributions: Employee’s Contribution and Employer’s Contribution.
2. Employees must contribute 12% of their basic pay every month towards the EPF account as per the EPF norms. The same amount is matched by the employer towards the employee EPF account.
3. You can withdraw the entire amount on retirement. Early withdrawals have certain terms and conditions to them. T.

EPF Withdrawal Rules 2022

EPF Withdrawal  Before 5 Years of Service:

Following are the PF withdrawal rules for withdrawing the corpus before five years of continuous service:

1. Withdrawals before five years of continuous service are subject to TDS.
2. No TDS is applicable if the withdrawal amount is less than INR 50,000.
3. As per ITR Forms 2 and 3, it is mandatory for you to provide a detailed breakup of the PF deposits every year.
4. The Income Tax Department can then easily assess whether or not your withdrawals are taxable.
5. They can also check if you are liable to pay additional tax after revaluation.
6. EPF contributions have the following four components to them – Employee’s contribution,
7. Employer’s contribution and the interest on both the deposits.
8. If you have claimed the EPF contributions under Section 80C of the Income Tax Act, 1961, for exemption, then all the four components of the EPF will be taxable.
9. If you haven’t claimed for exemption in the past. The employee’s contribution portion of the corpus will not attract any tax at the time of withdrawal.
10. The tax rates for the withdrawals depend on the income tax slabs in which you fall for that year.
11. The tax will be applicable only in the year of withdrawal but the consideration will be done separately for each year.

After Retirement:

Following are the PF withdrawal rules for withdrawing the corpus amount after retirement:

1. For withdrawals after the age of 58, EPF Act mandates application for claim of the final settlement. In other words, you should apply for the claim of the final settlement.
2. The total PF corpus or balance comprises both your (employee) contribution and the employer’s contribution.
3. If you have more than ten years of continuous service, you will be eligible for Employee Pension Scheme (EPS) amount as well.
4. In case if you did not complete ten years of service by the time of your retirement you will be able to withdraw the entire EPS sum along with the EPF amount.
5. Completing the service period of 10 years will give you the pension benefits post-retirement.
6. Post-retirement, EPF withdrawals are tax-free. The interest earned on the EPF corpus is taxable after retirement.
7. To claim the funds, you will have to register yourself on the Official EPF member portal. Fill the forms and also claim them online. The entire process is online, and you can also do it in the comfort of your home.

Tax on EPF Withdrawal

Before 5 Years of Service:

EPF withdrawals before five years of continuous service attract TDS. If the withdrawal amount is less than INR 50,000, then no TDS is cut. The applicable TDS rate is 10% on withdrawals if the PAN details are furnished. In case PAN details are not provided, then the rate is 34.608%.

EPF withdrawals made before five years of service are tax-free under the following scenarios:

• Serious illness
• Employer’s discontinuation of operations or winding down the organisation.
• Withdrawals for reasons that do not fall under the employer’s authority.
• Any advance made under the EPF Scheme is exempt from tax.

After Retirement:

EPF withdrawals post-retirement (age of 58 years) is completely tax-free. The interest on the EPF amount is taxable as per applicable income tax slab rates. If you do not withdraw the EPF funds post three years of retirement, you will have to pay tax on the interest earned.

Conditions For apply for PF withdrawal:

The following conditions are need for application of PF withdrawal

• The Universal Account Number (UAN) is activated, and the mobile number used for activating the UAN is in working condition.
• The UAN is linked with your KYC, i.e. Aadhaar, PAN, bank details, and the IFSC code.
• If the above conditions are met, there is no need for the previous employer to attest to your withdrawal application.

Procedure for Provident Fund  Withdrawal:

Step 1: Visit the UAN portal.

Step 2: Log in with your UAN and password. Enter the captcha and click on the ‘Sign In’ button.

Step 3: Click on the ‘Manage’ tab and select ‘KYC’ to check whether your KYC details such as Aadhaar, PAN and bank details are verified or not

Step 4: Once the KYC details are verified, go to the ‘Online Services’ tab and select the option ‘Claim (Form-31, 19 10C & 10D)’ from the drop-down menu.

Step 5: The following screen will display the member details, KYC details and other service details. Enter your bank account number and click on ‘Verify’.

Step 6: Click on ‘Yes’ to sign the certificate of the undertaking and then proceed.

Step 7: Now, click on ‘Proceed for Online Claim’.

Step 8: In the claim form, select the claim you require, i.e. full EPF settlement, EPF part withdrawal (loan/advance) or pension withdrawal, under the tab ‘I Want To Apply For’. If the member is not eligible for any of the services like PF withdrawal or pension withdrawal due to the service criteria, that option will not be shown in the drop-down menu.

Step 9: Then, select ‘PF Advance (Form 31)’ to withdraw your fund. Further, provide the purpose of such advance, the amount required and the employee’s address.

Step 10: Click on the certificate and submit your application. You may be asked to submit scanned documents for the purpose you have filled the form. The employer will have to approve the withdrawal request, and then only you will receive money in your bank account. It usually takes 15-20 days to get the money credited to the bank account.