How to Withdraw PF Amount easily
Get the PF withdrawal application processed through your previous employer:
Unlike the above two options, PF withdrawal can also be filed via your previous employer. Most companies will ask for a duly filled withdrawal form along with a blank cheque and will get your PF request processed via the EPF office. Getting in touch with your previous company’s HR manager is the best way to go about this.
Why Early PF Withdrawal Isn’t a Great Idea
PF amount is a corpus that you gradually build so as to ensure enough money on retirement. PF is a great financial instrument to help you save a little amount every month and that too at a great interest rate of 8.75% p.a. This interest earned on your PF account is tax-free (if withdrawn after 5 years of PF account opening). Keeping in mind all these benefits, PF amount withdrawal is not a great idea unless absolutely necessary.
In case you’re switching jobs, EPF should preferably be transferred rather than withdrawn.- PF amount is meant as your retirement corpus and should ideally not be touched before retirement. This fosters the habit of saving and makes life stress-free for employed individuals
- If you withdraw your PF amount within 5 years of opening the PF account, you will have to pay tax on the interest earned. Otherwise, interest on PF amounts is tax free under section 80C of the Income Tax Act
- You can easily transfer your PF account to your new company in case you switch your job
Withdrawing PF while you are employed is actually against the rulesProvident Fund is a fund that is made up of contributions by the employee and the employer for the respective period of employment. PF is an effective financial instrument to enable you generate enough corpus for post-retirement phase.
Generally, 12% of the basic monthly salary goes into your PF account while the same amount is contributed by your employer too. Your PF is essentially a corpus meant to be used after retirement; however, there are provisions which let you withdraw the PF amount earlier too.
Situations When PF Withdrawal Becomes Difficult
Sunil left his first job 5 years ago but has still not withdrawn his PF amount. Last week when he decided to initiate the PF amount withdrawal process, he was surprised to know that the company had shut down. Sunil does not know how to obtain his PF amount which is now over Rs.2 Lacs.
Ashok had submitted his PF documents to his previous employer for withdrawal of PF amount. However, the employer kept the form as it is and did not do anything about it. It’s been 2 months and still Ashok could not get his ex-employer to start the PF withdrawal procedure for him.
The above two problems are just examples of situations wherein individuals might want to withdraw the amount in their PF accounts. However, not all of us are sure about the procedure involved.
Ways to Withdraw PF Amount:
Although withdrawal of PF isn’t allowed while you are still employed, there are ways to get this amount in case you need it badly. You can make this withdrawal in case you have switched your job and do not want to get your PF account transferred.
Form 19 which is available either with employers or can be downloaded from EPFI website, is to be filled and submitted for withdrawing the PF amount. Once the application is submitted to the regional EPF Office, the PF amount along with the interest earned is received by the applicant within three months from the date of application. Here are three different ways in which you can easily withdraw your PF sum.
- Apply for PF amount withdrawal via UAN that is Universal Account Number: If you have UAN then you can directly apply for pf withdrawal. You do not require your previous employer’s approval for getting this application processed. However, the only challenge with this option is that most employers do not share the UAN with employees and in the absence of UAN this option cannot be availed.
- Submit your PF withdrawal application directly to the regional PF Office: Get a PF withdrawal form, fill it and submit the same directly to the regional Provident Fund Office. This procedure requires identity attestation since the PF office would want to be sure whether the right person is applying for withdrawal. Hence, your withdrawal form needs to be attested by one of the following listed authorities –
- Any Bank Manager
- A Gazetted Officer
- Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public
Attestation by Bank Manager is best when the bank is where you maintain your account. Since this direct method of application has chances of fraud so EPF office generally asks for a letter stating the reason for direct application. Non-cooperation from employer is a valid reason but only if you have a proof for that. Also, attaching a proof of employment letter is a plus.
News About Withdraw PF Amount
Now, Employees need not contact Employer for PF Withdrawal
Employees can now easily withdraw their Employee Provident Fund (EPF) balance without contacting their employees, provided the details of their Aadhaar Card and bank account have been linked to their EPF UAN. Currently, employees have to approach and contact their previous employers to withdraw balance. This old process involves physical visit to employers and creates unwanted delays. In order to remove these pain –points involved in withdrawing EPF balance, the Employee Provident Fund Organization has simplified the EPF withdrawal process by allotting a UAN (Universal Account Number) to EPF subscribers. The EPF subscribers need to link this UAN to their Aadhaar and bank account numbers. The government of India initiated the process of EPF number portability through UAN in October, 2014. Going forward, both government and private employees in Indian will not require approval from their employers to withdraw their EPF balance.
4th December 2015Online PF Withdrawal, 3 Hours Settlement Time
In a bid to fasten the pace at which PF settlements operate in the country, the Employees Provident Fund Organization is launching an online portal. This online facility will enable employees to settle PF claims within 3 hours of receiving the request. The facility is supposed to be launched by March 2016 and aims to link closely Aadhar details with PF accounts. However, for this online facility your UAN number should be linked with your Aadhar Number which in turn should be up-to-date with your bank account details. PF is one of the most basic savings maintained by almost all salaried employees in the country.26th October 2015Provident Fund Premature Withdrawals may be Capped by the Government to 75%
Government is looking to consider applying a cap on the premature withdrawals may have a cap of 75% until the age of 58 years. As per the existing rules, an individual can apply for the whole amount in the Provident fund, if he/she shows they have been unemployed for 2 months. The decision for the cap will be made within the next 2 weeks. For constructing a house, marriage, children's education, etc the PF amount can be withdrawn.7th October 2015EPFO likely to fix PF interest rates for FY16 in September 2015
The Employee Provident Fund Organisation (EPFO) is likely to fix interest rates for Provident Fund deposits for the financial year 2015 - 2016 this September (2015). The rate stands at 8.75% p.a. for the financial years 2014- 2015 and 2013 - 2014.The retirement fund’s governing body is set to meet on Sept. 16, 2015 to approve PF rates payable on deposits for the current fiscal. The EPFO currently manages about Rs.6.5 lakh crores of subscribers’ savings. About Rs.1 lakh crore is added to this corpus every year.4th September 2015Online PF Withdrawal Plan Put on Hold
EPFO has put on review its plan to allow PF withdrawal through online means for people who have linked their Aadhaar counts with bank and PF accounts. This comes after the Supreme Court’s recent ruling that Aadhaar card is not a necessity to avail benefits that are available to citizens by default.Mr K. K. Jalan, the central provident fund commissioner of EPFO, has said that the organization is now reviewing the online PF withdrawal facility to subscribers with PF and bank accounts linked with Aadhaar. Currently, subscribers have to manually apply for withdrawing their PF accounts.EPFO has been planning specialised services for subscribers having UAN or Universal Account Number, and whose KYC can be screened online. This includes filling PF withdrawal forms online if subscribers’ Aadhaar and PF accounts are seeded together.If it had been allowed, the changes from EPFO would have enabled subscribers to file for claims directly without involving their employers and get the process over with by simply submitting a copy of cancelled cheque of their bank account that is linked with their Aadhaar cards.20th August 2015
