- Date : 17/09/2020
- Read: 5 mins
Have you left your job of planning to quit? Read this piece know what to do with your EPF
For decades, the Employees’ Provident Fund, popularly known as EPF, has offered a financial shield for the salaried class in India. Investment in EPF India is automatic and mandatory. It creates a comfortable shelter for employees who have put in years of labour. Today, there are upwards of 4.5 crores EPF members in India, of which 7.2 million were added in this fiscal.
We are faced with various unforeseen situations in life. We may identify an interesting business opportunity to take up, or need support due to an unfortunate event such as a job loss. Or we may simply want to take a break from work. It is important to know how to benefit from EPF if we ever need to stop contributing to it.
Read on to find out how to check your EPF balance, how to withdraw from EPF, when to withdraw, etc.
What is EPF?
An EPF balance includes the employee's and employer’s contribution made over the years, along with the accrued interest. EPF is a secured cushion of investment and offers a healthy interest rate. For FY 2019–2020, the EPF interest rate in 8.5%. Though this is a slight drop from the previous year, EPF still stands out as one of the best investments in your portfolio.
EPF also includes the Employees’ Pension Scheme (EPS), which is the pension contribution in EPF. EPS provides pension after one’s retirement at 58, so long as they have a minimum service of 10 years.
How to check the EPF balance
To check your EPF balance, you need to have your account tagged with your Universal Account Number (UAN). You can then download the EPF passbook from here.
When can one withdraw from EPF?
- Retirement from service after attaining 58 years of age
- Unemployment
- Change of job resulting in the transfer of EPF to the next employer
Under the current EPF rules, if you want to do an EPF withdrawal before turning 58, you can withdraw the full PF balance by staying unemployed for 60 straight days (two months) after leaving a job. You can withdraw 75% of the fund after remaining unemployed for one month.
Please note is that the lump sum withdrawal amount is allowed only if your service period is less than 10 years. If it is more than 10 years, you are given a certificate of pension, stating pensionable service, pensionable salary, and the amount of pension due on exit of employment.
Related: Online EPF transfer: A step-by-step guide
Withdrawal process
Withdrawal from EPF is simple if you have an Aadhaar number, since the process can be completed online on the e-Sewa portal. Your UAN must be activated before you log in to your account on the Employees' Provident Fund Organisation (EPFO) portal. Select ‘One EPF Account (Transfer Request)’, then select either previous or current employer to attest the transfer claim form, validate an OTP, and hit ‘submit’.
You can drop by later to check the status of your EPF claim status. If you do not have an Aadhaar card, however, you have to visit the EPFO office to submit the withdrawal claim form with a cancelled cheque of your bank account. You will have to provide a Permanent Account Number (PAN) if you have worked for less than five years, plus two copies of Form 15G/15H, if applicable.
Related: How to check your EPF Balance
While claiming EPF the required form can differ. Employees who resign from a job before they turn 58 years of age can withdraw the full EPF balance. You need to ensure that you choose the correct form, depending on your situation from below.
1. Withdrawing PF balance along with EPS amount (less than 10 years of service)
If your service period is less than 10 years, both EPF and EPS amounts will be paid. Just submit the Composite Claim Form along with the choice of 'final PF balance' and 'pension withdrawal' option. If you plan to join the service industry again, you may opt to get the 'scheme certificate' by furnishing Form 10C.
2. Withdrawing PF balance along with EPS amount (more than 10 years of service)
If you have already worked for 10 years or more, the EPS amount cannot be withdrawn. You can receive only the scheme certificate by filing Form 10C along with the Composite Claim Form. Pension will be paid from age 58 years, though a reduced pension can be availed of from age 50.
3. Withdrawing PF balance only and reduced pension (age 50–58; over 10 years of service)
You can get a pension after turning 50 only if you have at least 10 years of service. If you have worked for more than 10 years and are between 50 and 58 years of age, you may opt for a reduced pension. For this procedure, submit Form 10D along with the Composite Claim Form.
4. Withdrawing PF balance only and full pension (after 58)
After you turn 58, you have to submit Form 10D to claim the full pension. According to the amended rules, an EPF member can withdraw up to 75% of EPF account balance or three months’ basic wages or the amount that you need, whichever is lower.
Last words
You should always make EPF work for your benefit. It is recommended to transfer your EPF balance to the new employer when you change jobs, as it is a form of disciplined savings. If you quit to start your own business, the entire balance in your EPF account can be transferred to the National Pension Scheme. Read this to know how you can claim your EPF money.
For decades, the Employees’ Provident Fund, popularly known as EPF, has offered a financial shield for the salaried class in India. Investment in EPF India is automatic and mandatory. It creates a comfortable shelter for employees who have put in years of labour. Today, there are upwards of 4.5 crores EPF members in India, of which 7.2 million were added in this fiscal.
We are faced with various unforeseen situations in life. We may identify an interesting business opportunity to take up, or need support due to an unfortunate event such as a job loss. Or we may simply want to take a break from work. It is important to know how to benefit from EPF if we ever need to stop contributing to it.
Read on to find out how to check your EPF balance, how to withdraw from EPF, when to withdraw, etc.
What is EPF?
An EPF balance includes the employee's and employer’s contribution made over the years, along with the accrued interest. EPF is a secured cushion of investment and offers a healthy interest rate. For FY 2019–2020, the EPF interest rate in 8.5%. Though this is a slight drop from the previous year, EPF still stands out as one of the best investments in your portfolio.
EPF also includes the Employees’ Pension Scheme (EPS), which is the pension contribution in EPF. EPS provides pension after one’s retirement at 58, so long as they have a minimum service of 10 years.
How to check the EPF balance
To check your EPF balance, you need to have your account tagged with your Universal Account Number (UAN). You can then download the EPF passbook from here.
When can one withdraw from EPF?
- Retirement from service after attaining 58 years of age
- Unemployment
- Change of job resulting in the transfer of EPF to the next employer
Under the current EPF rules, if you want to do an EPF withdrawal before turning 58, you can withdraw the full PF balance by staying unemployed for 60 straight days (two months) after leaving a job. You can withdraw 75% of the fund after remaining unemployed for one month.
Please note is that the lump sum withdrawal amount is allowed only if your service period is less than 10 years. If it is more than 10 years, you are given a certificate of pension, stating pensionable service, pensionable salary, and the amount of pension due on exit of employment.
Related: Online EPF transfer: A step-by-step guide
Withdrawal process
Withdrawal from EPF is simple if you have an Aadhaar number, since the process can be completed online on the e-Sewa portal. Your UAN must be activated before you log in to your account on the Employees' Provident Fund Organisation (EPFO) portal. Select ‘One EPF Account (Transfer Request)’, then select either previous or current employer to attest the transfer claim form, validate an OTP, and hit ‘submit’.
You can drop by later to check the status of your EPF claim status. If you do not have an Aadhaar card, however, you have to visit the EPFO office to submit the withdrawal claim form with a cancelled cheque of your bank account. You will have to provide a Permanent Account Number (PAN) if you have worked for less than five years, plus two copies of Form 15G/15H, if applicable.
Related: How to check your EPF Balance
While claiming EPF the required form can differ. Employees who resign from a job before they turn 58 years of age can withdraw the full EPF balance. You need to ensure that you choose the correct form, depending on your situation from below.
1. Withdrawing PF balance along with EPS amount (less than 10 years of service)
If your service period is less than 10 years, both EPF and EPS amounts will be paid. Just submit the Composite Claim Form along with the choice of 'final PF balance' and 'pension withdrawal' option. If you plan to join the service industry again, you may opt to get the 'scheme certificate' by furnishing Form 10C.
2. Withdrawing PF balance along with EPS amount (more than 10 years of service)
If you have already worked for 10 years or more, the EPS amount cannot be withdrawn. You can receive only the scheme certificate by filing Form 10C along with the Composite Claim Form. Pension will be paid from age 58 years, though a reduced pension can be availed of from age 50.
3. Withdrawing PF balance only and reduced pension (age 50–58; over 10 years of service)
You can get a pension after turning 50 only if you have at least 10 years of service. If you have worked for more than 10 years and are between 50 and 58 years of age, you may opt for a reduced pension. For this procedure, submit Form 10D along with the Composite Claim Form.
4. Withdrawing PF balance only and full pension (after 58)
After you turn 58, you have to submit Form 10D to claim the full pension. According to the amended rules, an EPF member can withdraw up to 75% of EPF account balance or three months’ basic wages or the amount that you need, whichever is lower.
Last words
You should always make EPF work for your benefit. It is recommended to transfer your EPF balance to the new employer when you change jobs, as it is a form of disciplined savings. If you quit to start your own business, the entire balance in your EPF account can be transferred to the National Pension Scheme. Read this to know how you can claim your EPF money.
