EPF or PF Withdrawal Rules 2024

EPF or PF withdrawal rules in 2024, including withdrawal limits, tax implications, and how to apply for partial or full withdrawal.
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PF withdrawal rules
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4 mins
14-September-2024

The Employees’ Provident Fund (EPF) which serves as a mandatory savings and retirement fund for eligible employees has undergone notable changes in the financial year 2023-24. The Employees Provident Fund Organisation (EPFO) has revised the interest rate to 8.25%, marking an uptick of 0.10% from the previous fiscal year's rate of 8.15%. This adjustment not only impacts the annual interest earnings but also shapes the financial decisions of millions of workers.

Mandated by EPF regulations, employees to put in 12% of their monthly basic salary, and employers are obligated to match this contribution.

Accrued funds earn annual interest. This article functions as an essential guide, examining the most recent updates in EPF withdrawal rules for 2024. From the intricacies of eligibility criteria to procedural details, we delve into the aspects shaping provident fund withdrawals in the present year.

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Probable Reasons for PF Withdrawal

Potential reasons for withdrawing PF are:

For Medical Purposes:

If employees have medical expenses, they can withdraw either their PF contribution with interest or up to six times their monthly salary, whichever is less. This option is for medical treatments for themselves, their spouse, children, and parents. Importantly, there is no waiting period or minimum work duration required, ensuring quick financial help during tough health situations.

For Repaying Home Loan:

Members with outstanding home loans can withdraw up to 90% of their provident fund corpus if the house is registered in their name or held jointly. However, a minimum of 3 years of complete service is a prerequisite for this withdrawal, ensuring a balance between service tenure and financial assistance for home loan repayment.

For Wedding:

Eligibility for wedding-related withdrawals requires a minimum of 7 years of service. Contributors can withdraw 50% of their contribution with interest for their own, siblings', or child's marriage, providing financial aid for significant life events.

For Renovating and Reconstructing a House:

Employees planning renovations or reconstruction can withdraw funds from their EPF account, provided the house is held in their name or jointly with their spouse. A minimum of 5 years of total service is required, and members can withdraw up to 12 times their monthly salary from the provident fund account.

For Purchasing or Constructing a New House:

Members aiming to purchase or construct a new house can withdraw a partial amount from their EPF, subject to the property being registered in their name or jointly with their spouse. This option is available after completing a minimum of 5 years of total service, with withdrawal limits defined by salary multiples or the cost of the property. Importantly, this withdrawal can only be made once during the entire service tenure.

For Retirement:

Upon reaching 58 years of age, individuals can withdraw their entire provident fund corpus, with the flexibility to withdraw up to 90% of the balance, offering financial security in the retirement phase.

For Unemployment:

In the face of unemployment, individuals can withdraw 75% of their provident fund after one month of unemployment. For unemployment exceeding two months, the remaining 25% of the corpus can also be withdrawn, providing a financial cushion during extended periods of joblessness.

For education:

Individuals with PF accounts can withdraw 50% of their total employee contribution to EPF. This can be utilised for higher education expenses or to cover the educational costs of their children after completing class 10.

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EPF Withdrawal Guidelines for 2024

Mentioned below are the fundamental EPF withdrawals rules in 2024:

Withdrawal Limits:

According to the updated regulations, PF account holders can withdraw an amount equivalent to three months of their basic salary plus dearness allowance or 75% of the net balance in their EPF account, opting for the lower of the two.

Restrictions During Employment:

While actively employed, individuals are restricted from withdrawing any funds from their PF account, whether in full or partial amounts. The withdrawal option becomes accessible during periods of unemployment.

Partial Withdrawal During Short-term Unemployment:

In the event of a one-month or longer unemployment period, individuals are permitted to withdraw up to 75% of their EPF funds. The remaining balance can be withdrawn if unemployment persists for two months or more.

Online Submission and Processing:

Withdrawal requests can be conveniently submitted online, streamlining the process for account holders. Online submissions are typically processed within three working days, ensuring a swift response to financial needs.

Offline Claim Processing Duration:

Conversely, offline claims may take an extended period of up to 20 days for processing. Individuals opting for offline methods should consider the longer processing timeframe when planning their financial transactions.

Documents Needed for PF Withdrawal

Here are the documents required to withdraw your PF funds:

  • The UAN (Universal Account Number) is mandatory and can be obtained from the employer.
  • Ensure your bank details match the EPF account's registered name.
  • The bank account linked to the provident fund must be in the account holder's name.
  • Personal details like father’s name and date of birth must match the identity proof.
  • Employers handle submitting necessary details to EPFO and recording employee exits.
  • Clearly state joining and leaving dates for accurate processing.

How to apply for EPF Withdrawal

There are 2 methods to apply for EPF withdrawal:

Physical Application:

When opting for a physical application for EPF withdrawal, individuals are required to download the new Composite Claim Form, either (Aadhaar) or (non-Aadhaar), specifically designed for this purpose. The choice between the two forms depends on the linkage of Aadhaar and bank details on the UAN portal and the activation status of the Universal Account Number (UAN). If Aadhaar and bank details are successfully linked and the UAN is activated, applicants can utilize the Composite Claim Form (Aadhaar). Submission of this form can be made directly to the respective jurisdictional EPFO office without the need for employer attestation. Alternatively, if Aadhaar and bank details are not linked on the UAN portal, applicants should use the (non-Aadhaar) Composite Claim Form, complete the necessary information, and submit the form with employer attestation to the respective jurisdictional EPFO office.

Online Application:

The EPFO provides a convenient online withdrawal option to simplify and expedite the EPF withdrawal process. To initiate an online withdrawal through the EPF portal, certain prerequisites must be met. This includes the activation of the Universal Account Number (UAN) and ensuring that the mobile number used for UAN activation remains operational. Additionally, successful linkage of the UAN with various KYC details, such as Aadhaar, PAN, bank information, and the IFSC code, is crucial for a seamless online withdrawal experience. Meeting these conditions enables individuals to leverage the efficiency and ease of the EPFO's online withdrawal facility.

Taxation on EPF Withdrawal

The taxation on EPF withdrawal is subject to various rules and conditions. If an individual withdraws their EPF balance before completing five years of service, Tax Deducted at Source (TDS) is applicable. The TDS rate stands at 10% if the Permanent Account Number (PAN) is furnished at the time of withdrawal. In cases where PAN information is not provided, the TDS rate increases to 34.608%. However, it is important to note that if the withdrawal amount is less than Rs. 50,000, no TDS is deducted.

There are specific scenarios exempt from TDS

  1. TDS is not applied if the termination of service is beyond the individual's control. Events such as company lockouts, retrenchments, or employee layoffs fall under this category.
  2. TDS is not applicable when the service termination is a result of a serious medical condition, including physical or mental disabilities, making it impossible for the individual to continue employment. In such cases, the EPF withdrawal remains untaxed, providing relief in challenging circumstances.

Additional read: EPF Balance Check Online

Grievance Portal of PF Withdrawal

For those dissatisfied with EPFO services, they can file their complaint online in EPF grievance portal. Register complaints, send reminders, track complaint status, upload necessary documents, and modify your password through this user-friendly system.

Also read below articles related to EPF or PF:

Frequently asked questions

Is there a Grievance Portal for PF Withdrawal?

Yes, EPFO provides a Grievance Portal for PF withdrawal-related issues. Individuals can address concerns and track the resolution status online.

Is there any limit for PF withdrawal?

The withdrawal limit depends on factors like employment duration and purpose. Typically, individuals can withdraw the full amount after retirement or remain unemployed for a certain period.

Are PF contributions eligible for tax deductions?

Yes, PF contributions under Section 80C are eligible for tax deductions, up to a specified limit, providing a tax benefit for contributors.

Do we need to ask our employer before withdrawing PF?

While it is not mandatory, informing the employer about the withdrawal is advisable for coordination and seamless processing of the PF withdrawal request.

How to print a PF passbook?

EPFO members can print their PF passbook by logging into the EPF member portal using their UAN credentials and selecting the "Download Passbook" option.

Which is better, PPF or EPF?

The choice depends on individual preferences. EPF is an employer-employee contribution, while PPF is a voluntary individual contribution. Both have unique advantages and suit different financial goals.

What is the current EPF interest rate?

The EPF interest rate varies and is declared by the EPFO annually. The current EPF Interest Rates of financial year 2023-24 is 8.25%.

How many days required PF withdrawal?

It typically takes about 20 days to process the EPF claim. Once settled, employees can expect to receive the PF amount in their bank accounts.

Can I withdraw 90% of my PF?

EPFO allows members 54 years or older to withdraw up to 90% of their EPF balance one year before retirement.

Can I withdraw my PF after 5 years without leaving the company?

Yes, partial withdrawals from your EPF account are allowed for specific reasons like home loan repayment, medical expenses, or education after five years of continuous service without leaving the company.

How much PF can be withdrawn after resignation?

After resignation, you can withdraw the entire employee and employer contribution to the EPF, along with the interest accumulated, subject to certain conditions and tax implications.

How long can I keep my PF account after leaving my job?

You can keep your EPF account indefinitely after leaving a job, but it becomes inactive after three years of non-contribution. It will continue to earn interest for three years post-inactivity.

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