The Employees' Provident Fund Organization (EPFO) has laid down certain rules for EPF members to withdraw their PF amount. As per the new EPFO rule, a person can withdraw around 75% of their total PF amount in the case of one month of unemployment. The rest of the PF amount will be transferred to a new account.
Covid-19 Pandemic - New PF Rules:
- Any EPF member with Universal Account Number (UAN) working in a factory or establishment covered under EPF & MP Act, 1952 is eligible to get EPF advance to fight against Covid-19 pandemic.
- As Covid-19 has been declared as a Pandemic by the Indian Government, employees working in establishments or factories across entire India can get non-refundable advance from their EPF account.
- Under this new provision, employees can withdraw either their non-refundable advance of their basic wages and dearness allowance for three months or 75% of their total PF amount, whichever is least.
- Under Atmanirbhar Bharat Package, the Central Government has reduced the EPF contribution of both the employer and employee from 12% to 10% of basic wages and dearness allowance for all establishments covered under EPF & MP Act, 1952.
- The reduction in the rate of EPF contribution will benefit 4.3 crore employees and employers of over 6.5 lakh establishments. This measure will help them to manage the liquidity crisis during Covid-19 pandemic. As a result, the employee's take home salary will be high.
- The rate of EPF contribution will remain 10% for three months - May 2020, June 2020 and July 2020.
- However, this reduction in EPF contribution is not be applicable for establishments availing PMGKY benefits or establishments like Central and State Public Sector Enterprises or establishments owned by/ controlled by/ under the control of Central or State Government.
PF Rules announced by Finance Minister:
The Finance Minister, Nirmala Sitharaman has made an announcement that the relaxations in EPF rules will help employees to combat the financial difficulties due to Covid-19 pandemic. With new relaxations, EPF members can now withdraw either 75% of their PF balance or three months wages as non-refundable advance, whichever is less.
She also stated that for the next three months, the government will pay the EPF contribution of both the employee and the employer which comes around 24% of the employee's basic salary. This rule is applicable only for those establishments which have 100 employees and 90% of them earning salary less than Rs. 15,000.
These measures came as a part of Finance Minister's announcement of PMGKY package worth Rs. 1.7 lakh crore to reduce the burden of the poor people as a result of Covid-19 imposed lockdown.
Still, the non-refundable advances are permissible only for specific reasons like marriage, housing, etc. and it is allowed especially for employees who have fulfilled minimum service period.
Current PF Withdrawal Rules 2020:
As the EPF account comprises of the contribution of both the employee and the employer, the employee cannot be able to withdraw his/her EPF amount all of a sudden. The employee should adhere to the EPF rules and regulations in order to withdraw their PF balance.
Rules you need to know about EPF withdrawal:
- You cannot be able to withdraw your EPF amount during your employment period. As EPF is a long-term savings scheme, you can withdraw the full amount only after retirement.
- You can withdraw partial amount from your EPF account only for specific reasons such as medical emergency, marriage, housing and higher education. In such cases, you can claim for partial withdrawal in online.
- Though the EPF amount can be withdrawn only after retirement, that is at the age of 55, early retirement is not taken for consideration. However, EPFO permits 90% withdrawal of EPF amount one year before retirement on condition that the person should not be less than 54 years of age.
- In case of unemployment due to retrenchment or lockdown, you will be allowed to withdraw your EPF amount.
- In such case, you need to declare that you are unemployed, in order to withdraw your EPF amount.
- The old EPF rule allowed EPF member to withdraw their EPF amount in full after unemployment for 2 months.
- But the new EPF rule will allow you to withdraw only 75% of the EPF amount after unemployment for 1 month. The rest of the amount will get transferred to your new account after your new employment.
- Taxation on EPF amount depends on your service. If you are contributing continuously for 5 years in your EPF account, your EPF corpus is exempted from tax. If there is a break in 5 years of continuous contribution, your EPF corpus is taxable.
- For premature withdrawal of EPF amount, TDS is applicable. TDS is not applicable if the entire amount is less than Rs. 50,000. The TDS rate will be 10% if you provide PAN card with the application. If you fail to provide PAN card, the TDS rate will be 30% with tax. You can also avoid TDS by providing 15H/15G, a declaration form for non-taxable income.
- In case of unemployment or termination due to ill-health, EPF withdrawal is exempted from tax.
- Money transferred from your EPF account to National Pension Scheme (NPS) are exempted from tax.
- You need to fill Composite Claim Form in order to make partial or final withdrawal of your EPF amount.
- You need not wait for the approval of your employer to withdraw your EPF amount. If you have linked your UAN and Aadhaar, you can easily claim for EPF withdrawal in online. If you don't have your Aadhaar linked with UAN, your need to get approval from your employer.
Steps to enter exit date in EPFO portal:
Your PF withdrawal process will get delayed if the exit date is not mentioned. The EPFO has now provided the facility to enter the exit date to the employees. With this new facility, employees need not wait for the employer to enter the exit date as it might delay the withdrawal process. Employees can enter the exit date by themselves in the EPFO portal.
Step 1: Login to the UAN portal using your UAN and password.
Step 2: Once logged into your EPF account, go to 'View' menu and click 'Services History' to check whether the exit date is mentioned or not.
Step 3: If the exit date is not mentioned, go to 'Manage' menu and click 'Mark Exit'
Step 4: Choose 'Employer' from the drop-down menu
Step 5: You will be taken to a new page where you need to enter your date of birth, date of joining and date of exit. If your exit date is before 15th day of the month, then enter the exit date as mentioned in your resignation letter.
Types of PF Withdrawals:
EPF members can make three types of PF withdrawals on the EPFO Member Portal. They are,
- PF Final Withdrawal (Form 19)
- Pension Withdrawal (Form 10C)
- Partial PF Withdrawal (Form 31)
With Aadhaar linked with UAN, EPF members can make the above-mentioned withdrawals by filling the respective form in online itself.
Partial PF Withdrawal for Medical Reasons:
In cases of emergencies like medical treatment, education, wedding, house construction, etc., EPFO allows you to partially withdraw your PF amount. You can withdraw your PF amount for the medical treatment of yourself or your family members. According to the old EPF rule, EPF members need to attach the medical certificate with the PF claim form. But the recent update from EPFO allows EPF members to proceed for PF partial withdrawal claim without any need for medical certificate or any documents. You can self-declare by choosing 'self-declaration' in the Composite Claim Form and withdraw your PF amount partially.
PF Withdrawal Forms:
Depending on the age, claim reason and the service of the employee, the PF withdrawal claim forms may vary. To make withdrawals, Form 19, Form 10C and Form 31 were used earlier. In recent days, these forms were replaced by the composite claim form. Earlier, the forms need UAN details of the employee. But it has now been replaced with composite claim form and Aadhaar details of the employee.
Based on the employee's criteria, the PF withdrawal forms may vary as mentioned below.
1. If the member is working in an establishment, he/she need to submit,
- Aadhaar or Non-Aadhaar Composite claim form to apply for advance/ withdrawal
- Form 14 to finance LIC policy through PF account
- Form 10D to claim for Pension Fund if having completed 10 years of eligible service
- Aadhaar or Non-Aadhaar Composite claim form to claim for Pension Fund if not having completed 10 years of eligible service.
2. If the member has left an establishment, he/she need to submit,
- Form 13 to transfer account
- Aadhaar or Non-Aadhaar Composite claim form to apply for final PF settlement, withdrawal benefit/ scheme certificate from Pension Fund
- Form 10D to claim pension if the age is above 58 years and having completed 10 years of eligible service.
3. If the member has left the job due to physical disability, he/she need to submit,
- Aadhaar or Non-Aadhaar Composite claim form to apply for final PF settlement and withdrawal benefit from Pension Fund
- Form 10D to claim for pension and monthly member pension.
4. If the member is deceased, the Nominee/ Beneficiary/ Legal Heir need to submit,
- Form 20 for final settlement of PF
- Form 10D to claim for pension and monthly member pension
- Form 5IF to claim for EDLI Insurance amount
- Aadhaar and Non-Aadhaar Composite claim form to avail withdrawal benefit from Pension Fund.
EPF Online Grievance Portal:
EPF members can register their grievances related to EPF withdrawal in online. In this EPF grievance portal, you can file your grievance, send reminder, view status and upload grievance document. You can register your grievance for issues related to,
- Pension settlement (10D)
- Transfer of PF amount (F13)
- Scheme Certificate (10C)
- Return or misplacement of cheque
- Provision of PF slip or PF balance
To register your grievances,
- Visit EPF i Grievance Management System https://epfigms.gov.in/Grievance/GrievanceMaster
- Select your status
- Enter all the required details and click 'Submit'.
Once you have registered your grievance, you can check the status of your grievance in the portal itself. If your grievance remains unresolved within the given time, you can remind them by clicking 'Send Reminder'. You need to enter your grievance registration number and password to send reminder.