PF Withdrawal Process: Everything You Need To Know
A Provident fund is a yearly contribution required from each employee, but this amount can be as small as $50. Investing in a Provident Fund is an excellent way to build a financial cushion for retirement. With contributions based on the age of the person, you can increase your income as you get older and retire.
If you are a recent retiree, you might be wondering, what is the provident fund and PF withdrawal process? To answer your question, you need to know the details of PF. There are two basic processes: the lump sum withdrawal and the EPS. The first requires a certificate of pension, listing the amount of pensionable service and salary, and the amount of pension due on exit from employment. For the latter, you will need a composite claim form. This form will have to be filled out by the employee, providing the details of Aadhaar.
The next step in the PF withdrawal process is to fill out the form. You must fill-up the form, provide the necessary details, and attach two copies of form 15G or 15H. Using a computer, you can do it online if you prefer. You must also know the deadline for claiming PF withdrawal. The process may take as long as a few weeks, so be sure to start early.
When you change jobs, you do not have to withdraw your PF. Just transfer your PF balance to your new employer. If you stay unemployed, you can withdraw your PF directly from the EPFO. If you are linked to both your UAN and Aadhaar, you can withdraw the entire amount right away. Moreover, you can withdraw up to 90% of your PF account after you reach the age of 54. Similarly, if you are unemployed for a month, you can withdraw up to 75% of your provident fund. However, if you are disabled, you can withdraw your pension amount only if you have been unemployed for 2 months or more.
Important steps to withdraw PF (Provident Fund):
1. Fill Out a Withdrawal Form
If you are a working employee, you can fill out a withdrawal form to withdraw your Provident Fund. However, there are certain formalities that you have to complete before you can withdraw your Provident Fund. First, you need to complete KYC (Know Your Customer) procedures. These procedures will verify your identity and eligibility. Once you have all the required information, you can proceed to withdraw your Provident Fund.
2. Submit the Form to the PF Office
If you have decided to withdraw your PF funds, there are several procedures to be followed. The first step is to submit the form to the PF office. Once you have the form, it must be completed offline, attested by your employer, and linked to a mobile or bank account. The employer must approve your request before you can withdraw the funds. The money will then be transferred to your bank account after about fifteen to twenty days. You will not have to present your PAN card or Aadhaar card to withdraw your PF funds.
3. Waiting for Approval
When requesting an EPF withdrawal, you must fill out the form PF ADVANCE (FORM-31) and submit it to your PF office. After the withdrawal form is submitted, you must wait for approval. Normally, you have to wait for a period of seven to ten days. However, the process is much faster if you submit all the necessary documents.
4. Withdraw the Money
How to Withdraw Money After Approval of PF Withdrawal Form? After submitting the form, you will be required to submit a few documents. You will need to validate the bank account number and choose the withdrawal reason. You will also need to upload a scanned copy of your cheque along with your address and OTP. Once these steps are complete, you will be able to withdraw the money within a few days.
5. Declare the Income
When you want to withdraw your PF, you need to declare your income. The amount you can withdraw will depend on the reason you’re withdrawing the money. Usually, it’s 6 months of salary, but there are some exceptions. For example, if you’re going to take a break from work for some medical reasons, you can withdraw half of your money without TDS. But you need to note that TDS applies only if you are withdrawing more than half of your PF account.
6. Pay Taxes
To pay taxes after withdrawing PF, you must first calculate the total amount of taxable earnings. The total amount is the sum of both employee and employer contributions. The employee contribution is tax-free within the limit of twelve percent, while the employer contribution is taxable as income from the salary. Once you have calculated the total amount of taxable earnings, you should subtract the interest from the employee contribution. If you have been deferring contributions for a long time, you should calculate the amount of interest.
7. Enjoy the Money
Withdrawing PF from your bank account can seem like an overwhelming process, but it is important to remember that the government is ensuring that you have a hassle-free retirement. After you have withdrawn your PF, you should invest it in the best-value plan for your circumstances. Here are a few tips for you to enjoy the money you withdraw from your bank account. After all, you worked hard for it!
Unemployed – How Many Days Will It Takes for Me to Withdraw My PF Funds?
If you’re unemployed, you may wonder: How many days will it take for me to withdraw my PF funds? You can withdraw up to 75% of your PF after one month and 25% after two months. The Offline Withdrawal facility will no longer be available starting July 2019. If you’re interested in withdrawing funds before that date, you’ll need to download a new composite claim form from the EPFO website. There are certain conditions you must meet in order to withdraw your funds.
Can I Withdraw 100% of My PF Amount?
Can I withdraw 100% of my PF amount? The answer is “Yes”, if you can show that you have been jobless for two months. You can also close your EPF account after that period. But you have to meet certain criteria to get the benefit. One must be 54 years old or older to withdraw 100% of your PF amount. However, you can withdraw up to ninety percent of your PF balance after a year.
If you have already accumulated enough PF money and would like to withdraw it, you need to know that withdrawal is taxable after five years of continuous service. However, transferring your PF balance to a new employer does not count as continuous service. In this case, the new employer will have to deduct your employer contribution in order to consider your withdrawal as taxable income. Assuming that you have remained with your previous employer for at least 1.5 years, the PF withdrawal process is tax-free.