Provident Fund (‘PF’) & Withdrawal Process
By Sanga K
Provident Fund:
A provident fund is a government-managed, mandatory retirement savings scheme used in India, Singapore, and other developing nations. These funds also share some characteristics with pension funds provided by employers.
A worker gives a portion of his/her salary to the provident fund, and an employer should make a contribution on behalf of the employees. The money in the fund is then kept and handled by the government and ultimately withdrawn by the retirees or their surviving families in some countries. In certain cases, a provident fund even pays out to the disabled, who are not in a condition to work.
Contribution:
EPF (Employees’ Provident Fund), also referred to as PF (Provident Fund), is a mandatory savings cum retirement scheme for employees of an eligible organisation. As per the EPF norm, the employees must contribute 12% of their basic pay every month of an eligible organisation. A matching amount is contributed by the employer as well. The amount deposited in EPF accounts earns interest on an annual basis.
Employees can withdraw the entire sum accumulated in their EPF once they retire. However, premature withdrawals can be made on meeting certain conditions which are explained in this article.
Conditions for PF withdrawal:
Withdrawal for person who are no more in employment;
The employee need not take any approval from the employer and in this case — two ways available to withdraw amount from the EPF account i.e, Composition Claim (Aadhaar) and Composition Claim (Non Aadhaar).
Procedure for PF withdrawal:
Broadly categorised in to two parts;
· Offline application — Physical application
· Online application
1. Physical Application:
One can download the new composite claim (Aadhaar)/composite claim form (Non-Aadhaar) from EPFO portal
· New composite claim (Aadhaar) does not require attestation of employer. Employee can submit the form directly with jurisdictional officer.
· New composite claim (Non-Adhaar) require attestation from employer. Employee needs to get signed and attested from the employer and place the application in-front of the jurisdictional officer.
2. EPF withdrawal online:
Step 1: Go to the UAN portal by clicking;
Step 2: Log in with your UAN and password and enter the captcha;
Step 3: Then, click on the tab ‘Manage’ and select KYC to check whether your KYC details such as Aadhaar, PAN and the bank details are correct and verified or not; If any of those details are incorrect or incomplete the same needs to be corrected or completed, approved by you current employer or ex-employer and then approved by the PF department for you to move forward with withdrawal — All this is online, do not worry.
Step 4: After the KYC details are verified, go to the tab ‘Online Services’ and select the option ‘Claim (Form-31, 19 & 10C)’ from the drop-down menu.
Step 5: The ‘Claim’ screen will display the member details, KYC details and other service details. Enter the last four digits of your bank account 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, then 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.
Taxation on PF withdrawal:
TDS is deducted at 10%, if withdrawn before 5 years of service.
Remember to mention your PAN at the time of withdrawal. If PAN is not provided TDS shall be deducted at highest slab rate of 30%.
You can submit Form 15G/Form 15H if tax on your total income including EPF withdrawal is nil. TDS is not deducted if Form 15G/Form 15H is submitted only if you fall under the bracket of non taxable income.
Basic issues faced by people with regard to PF — FAQs;
1. Whether provident fund provides for any refundable loan for housing etc?
No. but, non-refundable loans are available for housing.
2. What are the Claim Forms that can be filed from the UAN-Member Interface directly by the employee?
Member can apply for
a. PF Final Settlement (Form19),
b. Pension Withdrawal Benefit (Form10-C) and
c. PF Part Withdrawal (Form31) from the Member Interface directly.
3. What are the requirements from the member to be for filing Online Claims?
Member should fulfil following conditions:
a. The member should have activated his/her Universal Account Number and the mobile number used for activating UAN should be in the working condition.
b. Member’s AADHAAR details should be seeded in EPFO database and he should avail OTP based facility for verifying eKYC from UIDAI while submitting the claim.
c. Member’s Bank Account along with IFSC code should be seeded in EPFO database.
d. Permanent Account Number (PAN) should be seeded in EPFO database for PF Final Settlement Claims in case his/her service is less than 5 years.
4. Is member required to give any document for preferring PF Part Withdrawal claim (Form-31)?
Member is not required to give any supporting document while preferring online PF Part Withdrawal case. Member’s act of preferring the advance claim online will be taken as his self- declaration for having applied for the same. Various links with regard to forms and content.
5. Can member divert the payment to some other Bank Account of his other than one registered with EPFO for preferring online claims?
No. Member can get the payment only into the Bank Account registered with EPFO and being shown to him under his UAN member interface. If the shown Bank Account is closed or if the member wants to use some other Bank Account, member should not prefer the online claim and first get the Bank Account changed through his current employer.
6. Can member apply online for advances where sanctioned amount has to be credited to Agency’s Bank Account directly?
No.
7. Is member required to submit the claim PDF generated on portal to employer / EPFO office?
No.
8. How is the member required to authenticate online claim submission?
Members applying online are required to authenticate their claim submission using OTP sent to their UIDAI registered Mobile number giving consent to UIDAI to share their e-KYC (Aadhaar) credentials to EPFO.
9. What is the process for online claim submission?
Steps in Brief would be as follows:
a. Login to the member interface using UAN credentials.
b. Satisfy oneself that KYC and service eligibility conditions as mentioned against his UAN are correct and complete.
c. Select the relevant claim.
d. Authenticate using OTP received against the mobile registered with UIDAI to complete the online claim submission.
10. Is there any mobile for EPF?
Yes, the app is “i-akaun”. It allows employees to check the PF balance, log in to EPFO website, activate their UAN, check PF claim status etc.
11. Which employer — previous or present — should the member approach after online submission of the claim with the duly signed printout of the claim?
The member is required to approach the employer opted for attestation while filing online submission of the claim with the duly signed printout of the claim form.
12. What is the time duration in which the member should submit the duly signed printout of the claim after its online submission?
The member is advised to submit the duly signed printout of the claim after its online submission immediately, but it should not exceed 15 days. The employer would have the option to reject the online claim application after 15 days. In case of any delay beyond this period, the member is advised to contact the authorized signatories/ employer for needful.
The contact details of authorized signatories are available under the Employer details in the
“View the status of Transfer Claims” under the tab “CLAIM”.
13. What are the service requirements for online filing of PF Final Settlement Claims (Form-19)?
Member should fulfil following service conditions:
a. Date of Joining and Date of Exit of Member should be available in the EPFO Database.
b. Member should not be working presently under any establishment coverable under PF Act.
c. The Claim should be submitted not before two months after leaving Establishment.
14. What are the additional service requirements for online filing of Pension Withdrawal Benefit Claim (Form-10C)?
Member’s Total Service should be more than 6 months and less than 9.5 years in addition to the conditions mentioned under 13) above for filing Pension Withdrawal Benefit Claim.
15. What are the service requirements for online filing of PF Part Withdrawal Claim (Form-31) (popularly known as Advance cases)?
Member’s Date of Joining should be available in the EPFO database.
Thank You
Information in this blog is intended to provide only a general outline of the subjects covered It should not be regarded as comprehensive or sufficient for making decisions, nor should it be used in place of professional advice.
Nitin Jogad & Associates| Chartered Accountants accept no responsibility for loss arising from any action taken or not taken by anyone using this blog.
