PF / Pension / Advance Withdrawal

What are the documents required for PF withdrawal?

• UAN Number

• Aadhaar card

• PAN Card

• Cancelled Cheque leaf/ Bank details

What are the PF withdrawal rules in India?

For Medical Purposes:

• An employee is allowed to withdraw employee’s share with interest or six times the monthly salary (whichever is lower) from the provident fund for the medical treatment purpose.

• It is applicable for medical treatments of self, spouse, children, and parents.

• There is no lock-in period or minimum service period for this type of withdrawal.

For Wedding:

At least 7 years of service is required to be completed to be eligible for pf withdrawal agents
50% of the employee’s contribution with interest can be withdrawn.
An employee can withdraw funds for his own, siblings or child’s marriage
For Renovating and Reconstructing a House :

• The employee can withdraw funds from his EPF account for the purpose of renovation and reconstruction.

• The house should be held in his/her name or held jointly with the spouse

• The employee must complete at least 5 years of total service

• The member can withdraw 12 times his monthly salary from his Provident fund account

For Purchasing or constructing a House:

• The member can withdraw from his employee provident fund for the purpose of purchasing a plot and constructing it.

• The property should be registered in his or her name or held jointly with a spouse.

• An employee should complete a minimum of 5 years of total service.

• 24 times of the monthly salary for purchasing a plot/36 times of the monthly salary for purchasing or constructing a house or the cost of the property or the total of employee’s and his employer’s share along with the interest amount (whichever is less) can be withdrawn.

• Withdrawal is allowed only after completing 5 years of service

• Withdrawal for the purpose of purchasing a plot and constructing it can be done only once in the entire service tenure.

Retirement :

• A person can withdraw his or her entire provident fund corpus after completing 58 years of age.

• The employee is allowed to withdraw up to 90% of the provident fund balance.

Unemployment:

• A person can withdraw 75% of his or her provident fund if he/she is unemployed for more than a month. EPF Withdrawal Rules before 5 years of Service EPF withdrawal before 5 years of continuous service attracts TDS on the withdrawal amount. However, if the withdrawal amount is less than ₹ 50,000, no TDS is deducted. In case you want to withdraw your funds before 5 years of service, you should keep the following EPF withdrawal rules in mind:

• As per the latest modification in ITR Forms 2 and 3, has to provide a detailed breakup of the entire amount deposited in the PF account every year.

• This will help the Income Tax Department to assess whether the withdrawal made by you is taxable or not.

• The department will also check whether additional tax has to be paid by you after revaluation.

• EPF contribution is done in four parts – Employee’s contribution, employer’s contribution and interest on each deposit.

• If the employee has claimed an exemption on EPF contribution for previous years as per Section 80-C, all four parts will be taxable.

• If the employee has not claimed an exemption in the previous year on EPF, the employee’s contribution part will be exempted from tax at the time of withdrawal.

• The tax will depend on the income slab in which the employee fell for that year.

• The tax will be applicable in the year of withdrawal but the consideration will be done for each year.

EPF Withdrawal Rules after Retirement

• As per the EPF Act, when a member retires at the age of 58 years, he has to claim for the final settlement.

• The total PF balance consists of both employees as well as the employer’s contribution.

• The member also becomes eligible for the EPS amount if he has served for a period of more than 10 years in continuation.

• In case the member has not completed 10 years of service at the time of retirement, he can withdraw the complete EPS amount along with his EPF.

• If he completes 10 years of service, the employee gets pension benefits after retirement.

• The withdrawal of the corpus accumulated in the EPF account after retirement is completely tax-free.

• The interest earned on the EPF corpus after retirement is taxable.

• If the member does not withdraw funds for three years after retirement, he will have to pay tax on the interest