Withdrawal rules 2016 for EPF and procedure for EPF Grievance redressal:
The Employee Provident Fund (EPF) is managed by the Employee Provident Fund Organisation (EPFO) of India, a statutory body under the labour ministry. It helps salaried employees save a part of their earnings each month, thereby building a tax-exempt corpus which is handed over at the time of retirement. EPFs, or simply PFs, are a long-term savings tool that helps retired employees to lead a financially stable life. An EPF subscriber can withdraw a part of his/her accumulated savings from the PF, only for some specific life events.
EPF Withdrawal rules
According to EPF rules, a salaried person can withdraw from his/her PF account only in two cases: first, he/she has no job, and second, when two months have passed since the person was last employed i.e. not attached to any company or unemployed for that period.
There can be cases, when employees, following a claims process, may withdraw from their PF account at the time of leaving a company. However, it’s advisable not to do likewise from the financial management perspective as salaried employees won’t be able to avail many benefits of maintaining a PF account, including tax-free interest, compulsory savings, and annual compounding among others. Instead, employees can transfer their PF balance from their previous employer to the account of their current employer. The Unique Account Number (UAN) system, introduced by the government, simplifies the process (management and transfer) of PF amounts given that it’s allotted to all employees and won’t change all through their career.
Exception to the above 2 months waiting period
The EPFO can waive the two-month waiting period for EPF withdrawal only in the following cases:
1. The employee is migrating abroad to settle permanently in a foreign country and doesn’t expect to return.
2. The employee has got a job offer in a foreign country.
3. A female PF employee, leaving the service to take care of her newborn.
In the first two cases, the employee has to furnish a copy of the visa along with the job offer/appointment letter (wherever applicable). In the third case, the employee must produce the municipal birth certificate of her child.
EPF withdrawal: Purposes
Salaried people may withdraw from their PF accounts for several purposes, subject to some conditions. Besides meeting the eligibility, individuals have to furnish relevant papers at the time of withdrawal.
Here’s a list of purposes and the quantum of contribution that can be withdrawn:
Salaried individuals can withdraw for self, children, or sibling marriage. He/she must complete at least seven years in service and can withdraw maximum 50% of the contribution (limited to thrice in the entire career).
A maximum withdrawal of up to either six times the employee’s salary or the total corpus to medical treatment of self, spouse, or dependent children.
Purchase of land/construction:
If an individual wants to withdraw from his/her PF account for purchasing a land and/or construction of a house, then the property must be registered in his/her name, or spouse, or held jointly. The person must have completed at least five years of service and can withdraw up to 24 times his/her salary. For constructing a house, up to 36 times of the salary can be withdrawn. The withdrawal for this purpose can be done only once during the entire service of the PF subscriber.
Home loan payoff:
For EPF withdrawal to payoff home loans, the house must be registered in the employee’s name, or spouse, or jointly. The employee must complete minimum 10 years of service. The withdrawal is capped at 36 times the PF subscriber’s salary.
The house, as in similar cases, must be registered either in the employee’s name, or spouse, or jointly. Minimum service of five years is required and maximum withdrawal can be up to 12 times the monthly remuneration.
An employee should be 54 years of age to withdraw up to 90% of his/her PF corpus.
People may withdraw from their PFs for several other reasons like premature retirement because of a physical or mental disability, or migrating/settling down abroad.
Tax deducted at source (TDS) is not levied on the withdrawn amount if the employee has been in five years of continuous service or more. But EPF withdrawal before five years will attract a TDS of 10% (for registered PANs), or a maximum of 30% (for unregistered PANs). An employee can submit the 15G form during withdrawal, if his/her income is less than the basic exemption, even after adding the withdrawal amount. If PAN is not submitted, then a 34% TDS will be deducted from the withdrawn amount. Those wanting to avoid TDS, must submit form 15H (senior citizens) or form 15G for amounts of up to Rs. 3 lakhs and Rs. 2.5 lakhs respectively. Both forms are declarations that may be used by individuals whose income are less than the amount to be taxed. No TDS is deducted if a PF account is transferred, or when an employment contract is terminated because of the employee’s failing health, cessation of the employer’s business or any other reason which is not the responsibility of the employee.
All paperwork involved in PF withdrawals can be alleviated; once the EPFO launches the online facility, later this year. It plans to settle PF claims within three hours of receiving a withdrawal application. The money will be credited directly to the subscriber’s bank account. Until the online withdrawal comes into effect, you can do the following…
1. Check out the nearest regional EPFO by using the following link
2. Submit your claim either in person or by mail using the below form 19UAN
For your convenience, the EPFO has simplified the withdrawal process and replaced the earlier withdrawal forms with a single page New Composite Claim Form (CCF).
The new common withdrawal forms are available in two variants as given below:
1. EPF Composite Claim Form (Non-Aadhar)
In case your UAN has not been seeded with Aadhar and bank details, you may submit this form for all types of withdrawals. This form requires attestation of the employer and is to be forwarded by the employer. You may click the link given below to download the form:
2. EPF Composite Claim Form (Aadhar)
If your UAN has been seeded with Aadhar and bank details, you may submit this form for all types of withdrawals. You may submit it to the EPFO directly without requiring the attestation of the employer. You may click the link given below to download the form:
and you should be able to get your money within a weeks time.
Recent changes effective 10th Feb 2016
The government, with effect from 10 February 2016, made four major amendments to the EPF withdrawal rules, to discourage employees from withdrawing from their PF accounts that are essentially a long-term savings instrument.
Check out the following table
Important Note: The proposed changes in EPF withdrawal rules has been rolled back by the Government.
The Consumer Protection Act details the procedure to resolve EPF grievances. An employee has to visit epfigms.gov.in and click on “Register Grievance” in this regard. All grievances related to withdrawal, transfer of accounts, insurance benefits, cheque misplacements, etc. can be tendered over the internet.
Online form: After registration, the tab opens a form which has to be filled by the complainant. He/she has to then select the category of the complaint and describe the issue with supporting documents if any.
Process: The applicant is allotted a unique registration number once the complaint has been filed, to track the progress of redressal. The application, meanwhile, is scrutinised, and if found valid, is forwarded to the relevant official for resolving.
Points to remember: The complaint registration number should be retained for all future correspondence and reference. It allows the applicant to search for the establishment code. If not available, the code can be found by entering the name of the city of establishment. The Employee Provident Fund internet Grievance Management System (EPFiGMS) also allows subscribers to check their PF account balance.
EPF and RTI
Right to Information (RTI) is a service offered by the central government to common people to get information on public service and other matters from any government department. EPFO is covered under RTI, an employee can apply to know any details regarding his/her PF. The desired data is given within a month of filing the application. RTIs are usually sought to get clarification on EPF withdrawal and transfer issues.
How to file an RTI
Buying a postal order: The applicant should visit the nearest post office and buy a postal order of Rs. 10. This is the application deposit fee. It must be issued in the name of the concerned EPFO office.
Drafting the letter: There’s no specific format for the application, one can simply write on a plain paper. But the application must have the name and contact details of the applicant, and should be addressed to the Central Public Information Officer (CPIO), Office of PF Commissioner, EPFO (mentioning the address of the concerned PF).
Important points to include in the application:
1. The employee has to mention his/her name, contact number, full address, PF account number and email id in the application.
2. It’s advisable to write the queries as a bulleted list. The content should be precise, followed by a declaration, like: “I do hereby declare that I am a citizen of India. I request you to ensure that the information is provided before the expiry of the 30-day period after you have received the application.”
3. The proof of payment of the requisite fees should be mentioned, like: “Attached Indian postal order for Rs.10, dated dd/mm/yyyy favouring the EPFO accounts officer as application fee.” Take a photocopy of the application, in case you need it again.
4. Verify the RTI application amount because it varies from state to state.
5. Send it only by registered post as private couriers are not accepted. Mark the post as “acknowledgement due”.
Claim Settlement in case of death of the EPF member
As per the announcement by the Hon’ble Prime Minister Mr. Narendra Modi on October 26, 2016, EPFO has issued guidelines to its field offices for the settlement of death claims within seven days from the date of submission of the claim form by the spouse/nominee/legal heir of the EPF member where the deceased member account is being maintained.