EPF is administered by the Employees’ Provident Fund Organisation (EPFO) under the EPF Act of 1952. Compared to the public provident fund (PPF), which is available to all Indian citizens, EPF is a retirement savings scheme available only to the salaried class.
It functions through joint contributions from both the employers and employee, wherein you receive the lump sum corpus at retirement.
The current EPF interest rate of 8.25% per annum is higher than PPF and the same as VPF, making it among the safest investment options for retirement and tax planning in India.
What is eligibility and tax benefit of EPF?
Eligibility includes the mandatory enrolment of salaried individuals with basic pay and dearness allowance of up to ₹15,000.
You can also opt for a voluntary contribution if basic pay and dearness allowance (DA) exceed ₹15,000 per month.
Notably, EPF is an EEE benefit tool — exempt investment, exempt maturity amount, exempt interest earned.
Employee contributions up to ₹1.5 lakh annually are exempt under Section 80C of the old tax regime.
Employers’ up to 12% contribution (below ₹7.5 lakh) is exempt under the old and new tax regimes.
There is no similar benefit at present under the new tax regime.
What are the key features of EPF?
| Factors | Employees Provident Fund (EPF) |
|---|---|
| Tenure | As long as contributions continue |
| Risk | Risk-free, guaranteed return as per fixed interest rate |
| Tax saving | Under Section 80C, up to ₹1.5 lakh |
| Minimum deposit | 12% of salary each from employee and employer |
| Access | Employees’ Provident Fund Organisation |
| Loan collateral | No, but partial withdrawal allowed |
| Interest rate | 8.25% fixed (annual review) |
| Who can operate | Salaried individuals |
| Withdrawals | Up to 90% partial withdrawal after 3 years for housing; full on or after 58 years of age |
| Sources: EPFO, Clear Tax | |
What are the types of EPF withdrawal and rules?
- Complete Withdrawal: You can conduct full withdrawal of EPF only if you have retired or are unemployed (75% of balance immediately; and remaining 25% after two months).
For pension withdrawals, the waiting period has been extended to 36 months post-unemployment for full withdrawal, while 75% can be withdrawn after one month.
- Partial Withdrawal: This is only allowed for specific reasons with set limits.
| Purpose | Limit | Service Required | Conditions |
|---|---|---|---|
| Medical | Employee share or 6 months’ wages | 12 months | For self or family treatment |
| Education | Up to 10 withdrawals | 12 months | For children’s education |
| Marriage | Up to 5 withdrawals | 12 months | For self or marriage of family member |
| House Purchase | Up to 90% of EPF | 12 months | Property in your or spouse’s name |
| Home Renovation | 12 times monthly wages | 12 months | Property in your or spouse’s name |
| Pre-Retirement | 90% of balance | After 54 or 1 year before retirement | Close to retirement |
| Special Cases | 100% employee share | 12 months | If no salary for 2 months or closure of establishment |
| Source: Clear Tax | |||
PF Pension Withdrawal Rules:
- You cannot withdraw pension money for less than six months of service;
- If you have served for more than 9.5 years, you are eligible for monthly pension instead of cash withdrawal;
- For employment between six months to 9.5 years, you can withdraw the full pension amount using Form 10C.
How to Withdraw PF Online? Step-by-step guide
In order to claim your EPF withdrawal online you need an active UAN with completed KYC verification for Aadhaar and Bank account. The processing time is usually 7–20 days with full withdrawal allowed after two months of unemployment or retirement.
Here’s a step-by-step guide:
- Login to UAN Member Portal with UAN and Password.
- Verify your KYC status as follows: Manage — KYC (check Aadhaar and Bank details).
- Click on ‘Online Services’ tab and select Claim (Form-31, 19, 10C & 10D).
- Verify Bank Account details by entering the required data.
- Click on Verify and then click ‘Proceed for Online Claim’.
- Select the claim type from the dropdown: PF Advance (Form 31) for those still working; Only PF Withdrawal (Form 19) and Only Pension Withdrawal (Form 10C) for those who have left their job.
- Notably, Form 10C or Form 19 cannot be applied if Date of Exit is not updated. Make sure to update the Date of Exit under the Service History section.
- Check on the disclaimer box, enter OTP for Aadhaar-linked mobile, and Click Submit.
How to Withdraw PF Offline?
PF withdrawal can be done offline by downloading the either of the two Composite Claim Forms (Aadhaar / non-Aadhaar).
- For Composite Claim Form (Aadhaar): This is to be used if you have seeded your Aadhaar and bank details on the UAN portal and if your UAN is activated. This form can be filled and submitted to the respective jurisdictional EPFO office without the attestation of the employer.
- For Composite Claim Form (Non-Aadhaar): This is to be used if your Aadhaar and bank details are not seeded on the UAN portal. You can fill and submit the form with the employer’s attestation to the respective jurisdictional EPFO office.
(All rates mentioned are as per the official website at time of writing on 11 April)
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
