2019-10-01 12:44:11LegalEnglishEmployees Provident Fund Organization permits the members to withdraw money in certain specified purposes. This article sets out the PF...https://quickbooks.intuit.com/in/resources/in_qrc/uploads/2019/10/PF-Withdrawal-Rules-When-Can-You-Withdraw-Money-Final.jpghttps://quickbooks.intuit.com/in/resources/legal/pf-withdrawal-rules/PF Withdrawal Rules: When Can You Withdraw Money?

PF Withdrawal Rules: When Can You Withdraw Money?

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Employees Provident Fund is a social security scheme of the government of India which aims to provide safety to the working class post their retirement. It is a kind of investment pool that is created over the number of years via the contributions made by both the employers as well as the employees. The amount collected over a period of time via these contributions along with interest is what the employees receive on their retirement.

There are three situations under which the full PF amount is payable to the members. In other words, the member employees are entitled to withdraw the full amount contributed towards the Employee Provident Fund. These circumstances include:

  • Retirement from service on or after attaining the age of 58 years
  • Remaining unemployed for a continuous period of not less than 2 months (60 days) immediately before the date on which the employee makes an application for withdrawal
  • Death of the member before the amount contributed towards PF becomes payable or the amount becomes payable but the payment has still not been made

In order to make withdrawal process easier and quicker for the subscribers of PF, EPFO introduced a one page Composite Claim Form. This Form is for both the EPF subscribers whose universal account number is linked with Aadhaar and not linked with Aadhaar.

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1. Withdrawal of PF Amount Without Using Aadhaar

PF subscribers who do not have their Aadhaar seeded with Universal Account Number (UAN) are required to use Composite Claim Form (Non-Aadhaar). Under this, subscribers are required to provide their PAN only if the period of their employment or period of service is less than 5 years. Further, they are also required to give their PF Account Number in case their UAN is not available. They are also required to attach two copies of Form No. 15G/15H if it is applicable to a particular employee.

Also, the employee is required to attach an original cancelled cheque clearly showing his name printed on it. In case the cheque facility is not available, a copy of the first page of the employees Bank Passbook attested by the employer or the bank manager needs to be given.

Further, the Composite Claim Form (Non-Aadhaar) needs to be attested by the employer. In other words, it should have the signature, designation and the seal of the employer. This is apart from the signature of the PF member.

2. Withdrawal of PF Amount Using Aadhaar

PF subscribers who have their Aadhaar seeded with UAN can submit Composite Claim Form (Aadhaar). The benefit to such subscribers is that they can directly submit the form to the respective EPFO office without getting it attested by the employer.

Since, payment of the PF amount is made in the bank account, a cancelled cheque that contains the employees’ name, bank account number and IFSC code also needs to be attached. The employee submitting such a form also needs to ensure that his complete details mentioned in Form 11 (New), Aadhaar Number and Bank Account details as available on the UAN portal are correct.

Furthermore, he also needs to verify if his UAN has been activated before submitting such a form.

EPF Withdrawal/Advances Rules On Purpose

Although, this is a scheme meant for the retirement of employees, the Employees Provident Fund Organization (EPFO) permits the members of such scheme to withdraw money from EPF for certain specified purposes. These purposes are mentioned in paragraph 62 to 68-O of the EPF Scheme. Withdrawal done for these purposes allow for a partial withdrawal of the money so contributed towards the EPF.

Following are the purposes for which a member can go for partial withdrawal of PF:

1. Purchase of Dwelling Site For Construction of a House

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 5 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 24 months Basic Wages and Dearness Allowance
  • Total of employee and employer share along with interest thereon
  • Actual cost of acquisition of the dwelling site

Conditions

  • The site should be purchased for the purpose of construction of a dwelling house.
  • Site must be free from encumbrances.
  • If the dwelling site is mortgaged to an agency solely for obtaining funds for the purchase of such a site, the site will not be considered as an encumbered property.
  • In case the site is acquired on a perpetual lease or a lease for a period not less than 30 years for the construction of house, such a site is not considered as an encumbered property.
  • The withdrawal of PF is not restricted if the allottee is prevented from transfer or disposal of the site purchased for the construction of the dwelling house. Provided such a site is held in the name of the agency.
  • No withdrawal would be given for purchasing a share in joint property or constructing a house on a site owned jointly. However, withdrawal shall be given for a site owned jointly with the spouse.
  • The site is not taken as an encumbered property if the site is held in the name of the agency.

2. Construction of a Dwelling House

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 5 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 36 months Basic Wages and Dearness Allowance
  • Total of employee and employer share along with interest thereon
  • Actual cost of acquisition of the dwelling site

Conditions

  • If the dwelling site is mortgaged to an agency solely for obtaining funds for the purchase of such a site, the site will not be considered as an encumbered property.
  • In case the site is acquired on a perpetual lease or a lease for a period not less than 30 years for the construction of house, such a site is not considered as an encumbered property.
  • The dwelling site of the house under construction is free from encumbrances.
    Withdrawal is permitted for the construction of a house on a site owned by the member or the spouse of the member or is jointly owned by the member or the house.
  • The site is not taken as an encumbered property if the site is held in the name of the agency.

3. Completion of Construction of the House for Which Construction Has Already Commenced

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 5 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 36 months Basic Wages and Dearness Allowance
  • Total of employee and employer share along with interest thereon
  • Actual cost of acquisition of the dwelling site

Conditions

  • The dwelling site of house under construction or proposed construction is free from encumbrance.
  • In case the site is acquired on a perpetual lease or a lease for a period not less than 30 years for the construction of house, such a site is not considered as an encumbered property.
  • Withdrawal is permitted for the construction of a house on a site owned by the member or the spouse of the member or is jointly owned by the member or the house.
  • The site is not taken as an encumbered property if the site is held in the name of the agency.

4. Purchase of a Dwelling House/Flat from Agency

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 5 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 36 months Basic Wages and Dearness Allowance
  • Total of employee and employer share along with interest thereon
  • Actual cost of acquisition of the dwelling site

Conditions

The dwelling house or flat is purchased from an agency, payment of the partial PF amount so mentioned shall be paid directly to such an agency.

5. Purchase of a Newly Constructed or Old House/Flat From An Individual

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 5 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 36 months Basic Wages and Dearness Allowance
  • Total of employee and employer share along with interest thereon
  • Actual cost of acquisition of the dwelling site

Completed Membership With EPFO in Years

6. Purchase of House/Flat on Ownership Basis From A Promoter

  • The house or flat to be purchased should be free from encumbrance.
  • If the flat/house is mortgaged to an agency solely for obtaining funds for the purchase of such a flat/house, the flat/house will not be considered as an encumbered property.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 36 months Basic Wages and Dearness Allowance
  • Total of employee and employer share along with interest thereon
  • Actual cost of acquisition of the dwelling site.

Conditions

The house or flat to be purchased from the owner is free from encumbrances.

7. Withdrawal For Substantial Alterations/Additions or Improvements In the House Owned by Member/Spouse/Jointly With the Spouse

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 5 years of membership with the EPFO from the completion of the house.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 12 months Basic Wages and Dearness Allowance
  • Total of member’s share along with interest thereon
  • Actual cost of alteration of the house.

8. Withdrawal For Addition, Alteration, Improvement/Repair in House Owned by Member/Spouse/Jointly With the Spouse

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 10 years of membership with the EPFO from the withdrawal as mentioned in point 7 above.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 12 months Basic Wages and Dearness Allowance
  • Total of employee’s share along with interest thereon
  • Actual cost of such alteration or repair.

Conditions

An undertaking from the agency needs to be given claiming that the amount would be credited to the employee’s account.

10. Grant of Partial Final Withdrawal on the Attainment of 57 Years of Age or Within One Year Before Actual Retirement or Superannuation Whichever is Later

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 57 years of age or is entitled to receive partial withdrawal within one year of Retirement or Superannuation whichever is later .

Amount of EPF to be Allocated

The employee member is entitled to withdraw 90 per cent of the amount standing in his PF Fund.

11. Withdrawal From the Fund for Member’s Own Marriage, the Marriage of his or her Son/Daughter/Brother/Sister

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 7 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw an amount not more than 50 per cent of his own share of contribution towards EPF including interest.

Conditions

The member is allowed to withdraw only three times for the purpose of his own marriage or marriage of his own daughter/son/brother/sister.

12. Withdrawal For Matriculation of the Member’s Daughter/Son

Completed Membership With EPFO in Years

The employee member withdrawing EPF for such a purpose must have completed 7 years of membership with the EPFO.

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw an amount not more than 50 per cent of his own share of contribution towards EPF including interest.

Conditions

  • The member is required to present the 10th standard pass certificate.
  • A certificate regarding the course of the study and expected expenditure from the head of the institution needs to be given.

13. Advance From The Fund For Illness in Certain Cases

a. For Member’s Own Treatment

Amount of EPF to be Allocated

The employee member is entitled to partially withdraw PF the least of the following:

  • 6 months Basic Wages and Dearness Allowance
  • Total of only employee’s share along with interest thereon.

b. For the Treatment of Family

The employee member is entitled to partially withdraw PF the least of the following:

  • 6 months Basic Wages and Dearness Allowance
  • Total of only employee’s share along with interest thereon.
Amount of EPF to be Allocated

All Topics

 

 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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