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Withdrawals

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FAQ'S on Provident Fund Withdrawals

  1. 1. Is taxation applicable to EPF transfers or withdrawals?
    1. A. As per the current regulations outlined in the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, any funds withdrawn from the Employee Provident Fund before completing five years of continuous service by the employee will be subject to taxation on the received income.
      B. Exclusions are granted in scenarios where employment cessation arises from health issues or business closure. Nonetheless, income tax does not apply to the transferred EPF balance when shifting to a new employer since it constitutes a seamless continuation of the account.
  2. 2. Is there a specific duration of service required for partial withdrawals for medical treatment purposes?
    1. A. There isn't a mandatory minimum service period for withdrawal for medical treatment. This withdrawal can be requested at any time, provided it's for oneself or immediate family members. Hospitalization is required for over a month, due to a significant surgery, illness, or physical disability. The withdrawal amount is capped at either six months' worth of PF wages or the employee's contribution, whichever is lower.
  3. 3. Is it possible for an individual to access their EPF funds one year prior to retirement?
    1. A. Yes. If an employee is 54 years old or older, they are eligible to withdraw up to 90% of their PF balance along with accrued interest, provided it is one year prior to their retirement.
  1. 4. What steps should one take after transitioning from one job to another? Additionally, what actions should be considered if an individual decides not to pursue further employment subsequent to resigning from a job?
    1. A. When transitioning between jobs, it's essential for an employee to transfer their provident fund balance from their former employer to their current one. The funds accumulated from the previous employment remain intact, while the new employer begins making fresh contributions from the start date of the new job. However, in cases where an employee resigns without securing new employment, they have the option to withdraw their provident fund balance. To do so, the employee must confirm that they do not intend to engage in any employment for the subsequent six months.
  2. 5. What interest rates apply to the EPF balance?
    1. A. The interest rates allocated to EPF account holders fluctuate annually, contingent upon the earnings amassed by the Employee Provident Fund Organization in the preceding year. Presently, as of 2018, the interest rate stands at 8.65%.
  3. 6. What tax advantages are accessible to the participating employee within the Scheme?
    1. A. As per regulations outlined in the Income Tax Act, there exists a provision for tax deduction which facilitates complete tax exemption for employees' returns.
      • a. Taxation on PF withdrawal exceeding Rs. 50,000 prior to 5 years from the opening of the EPF account, with PAN, incurs a TDS of 10%; without PAN, the TDS is 34.6%.
      • b. Withdrawal of PF exceeding Rs. 50,000 after 5 years of EPF account opening does not trigger tax liability.
      • c. PF withdrawals below Rs. 50,000 at any point during employment do not incur taxation.
      • d. Withdrawals due to circumstances such as termination or unemployment due to health issues are not subject to taxation.
  4. 7. What is UAN?
    1. A. The Universal Account Number (UAN) is a unique 12-digit identifier issued by the EPFO to each member, facilitating the management of their PF accounts. Acting as a central hub, the UAN enables members to consolidate all PF accounts associated with various Member Identification Numbers (IDs) into a single platform. With the UAN, employees can conveniently oversee, withdraw, and transfer their PF funds. During job transitions, it's essential for employees to furnish their UAN to their new employer for linking the new PF account. Given that the UAN grants direct online accessibility to employees, employers are unable to withhold or deduct their PF contributions.
  5. 8. What is the method for a member to retrieve their information via the portal?
    1. A. Members are required to access the UAN-based Member Portal website, which can be found at https://uanmembers.epfoservices.in/. To begin, individuals must activate their UAN by clicking on the designated link labeled 'Activate your UAN' on the UAN Member Portal. It is essential for members to have their UAN, mobile number, and Member ID at hand to complete the activation process on the UAN Member Portal. For additional information, please click on the provided hyperlink titled 'User Manual for Members'.

*Refer the FAQs on withdrawals for applicable terms and conditions

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