If you are a salaried person, then you must be having a PF (provident fund) account in which every month a fixed amount of money from your salary as well as from your employer gets credited. EPF (Employee Provident Fund) is a government-provided retirement benefit scheme that is maintained by the Employee Provident Fund Organisation (EPFO). The government understands that there could be extraneous circumstances where a person may need money to overcome a stressful financial situation. To help PF account holders in such situations, EPFO offers EPF loan.
What is EPF Loan?
Employer and employee contribute to the EPF every month for employee’s retirement. However, EPFO allows employees to partially withdraw money from their PF accounts and use it as a personal loan to deal with emergency situations. Before granting you the permission to partially withdraw money from your EPF account, EPFO checks if the reason for withdrawal is genuine or not.
When Can You Withdraw Money (Take Loan) from EPF?
Every individual comes with his own set of priorities and may need money for different reasons. But, if your reason to withdraw EPF is that you want to purchase a phone or equipment, you will not be able to make the withdrawal. EPFO has its own rules and follow them strictly and offer money for the following reasons only:
- Marriage: You can withdraw EPF for your own marriage or for your son’s and daughter’s marriage
- Education:Education can also be the reason for PF withdrawal. You can get money to fund your education or the education of your daughter, son, brother or sister
- Purchase of home or plot:As purchase of home or plot requires a huge amount, the Employee Provident Fund is available for the applicant in this case
- Medical treatment:If your spouse, daughter, son, father or mother is ill, you can without your EPF for the treatment. However, the loan against the EPF can be received only in the case of serious illness.
- Home loan payment:The payment of the home loan can also be done through the EPF as well, only if the applicant satisfies certain necessary conditions
- Calamity: Any natural calamity can bring you huge losses and EPF can with withdrawn to deal with them
- Addition/alternation of house:The EPF can also be withdrawn to renovate or expand your existing home
- Lockout:During harsh situations of lockout, an applicant may stop receiving his salary. Thus, to cope up and afford basic necessities of life, the EPF loan is available to those applicants
- Withdrawal before the retirement: An applicant can withdraw the majority of his/her corpus before one year of retirement
How Much EPF Can You Withdraw?
|Reason of Withdrawal||Limit of Withdrawal||Minimum number of years in service||Other terms and conditions|
|Education||Up to 50% of employee’s share of contribution to EPF||7 years||For either his education or his children’s after 10th class|
|Marriage||Up to 50% of employee’s share of contribution to EPF||7 years||For his own marriage or marriage of daughter/son or brother/sister|
|Purchase of home or plot||For home: up to 36 times of monthly wage plus dearness allowance (component of the salary)||5 years||The land must be in the name of the employee or spouse or jointly owned|
|For land: up to 24 times of monthly wages plus dearness allowance|
|Medical treatment||6 times of wages plus dearness allowance||N/A||For his own treatment or spouse, daughter, son, father or mother’s treatment. The patient should be hospitalised for more than a month|
|In case of cancer, paralysis, TB, leprosy, mental derangement or heart ailment, advance can be availed without hospitalisation|
|Home loan payment||Up to a maximum of 90 % from both employee’s contribution and employer contribution in EPF||10 years||The land must be in the name of the employee or spouse or jointly owned|
|Related documents to the housing loan should be presented|
|The accumulation in the employee’s PF account (or with the spouse), including the interest, should be more than Rs. 20,000|
|Calamity||Up to 50% of the employee share||N/A||Employer will have to provide the certificates of damage|
|Addition/alternation of house||12 times of your wages||5 years||The land must be in the name of the employee or spouse or jointly owned|
|The house should be constructed at least 5 years ago|
|Lockout||Equal to your unpaid wages||N/A||Employer must not be getting wage for last two months or his company must be closed for at least 15 days|
|Withdrawal before the retirement||Up to 90% of accumulated balance with interest||57 years||For himself|
How Can You Withdraw EPF Online?
- Go to official website of EPFO
- Login using your UAN (Universal Account Number) and password
- Click on ‘manage’ and verify your KYC details
- Click on ‘online services’ tab available on top menu bar and select Claim (Form-31, 19 & 10C ) from the drop- down
- Member details will get displayed on the screen. Enter the last 4 digits of your bank account and click on ‘verify’
- Sign the certificate of undertaking by clicking on ‘yes’
- When you will fill the withdrawal claim online, you get 3 options of forms:
- Form 19 (only PF withdrawal): This form is filled to withdraw the entire PF amount for full settlement
- Form 10C (only pension withdrawal): This form is filled to withdraw only the pension amount
- Form 31 (part withdrawal of PF): This form is filled for withdrawing EPF partially
- Submit the claim form by clicking on ‘proceed for online claim’
After you have completed the online process, EPFO will take your Aadhaar details from UIDAI to process your EPF claim. When approved, the EPF amount will be disbursed to your account within 10-12 working days.
How Can You Withdraw EPF Offline?
- Visit the official website of EPFO
- Download the new composite claim (Aadhar)/ composite claim form (Non-Aadhar) from here
- Fill the new composite claim form (Aadhar) and submit it to the EPFO office with attestation of employer
- Or, fill the new composite claim form (Non-aadhaar) and submit it to the EPFO office with attestation of the employer
Is it compulsory to contribute to EPF?
Yes, it is compulsory to contribute to EPF for those who have a basic salary of upto Rs. 6,500.
What are the various schemes under EPF?
There are three different schemes under EPF:
- Employees provident fund scheme: It is a saving scheme where an employee gets the complete accumulated balances when he retires (or even earlier in case of some specific events)
- Employees pension fund scheme: It is a monthly pension that is payable yo employees on their permanent disability or death
- Employees deposit linked insurance scheme: This scheme provides assurance benefit upon death of employee when in service
What would happen to the EPF if I change my job or quit it?
If you change your job, your PF balance can be transferred to the new employer. In such a case, the existing balance will be there and new contributions would be made by employer every month. And, if you quit your job, you can withdraw your EPF. All you need to do is to provide a declaration that you do not wish to work for the next 6 months.
Is it possible to check my EPF account statement online?
Is it possible to withdraw only my voluntary contribution?
No, that is not possible.
Would there be any tax deduction if I withdraw my PF?
There will be no deduction if you have been employed continuously for 5 years (including period of past membership with previous employer/employees if the PF is transferred). Otherwise, deduction of tax will take place on the share that is contributed by the employer to the employees PF.
How often can I change my nomination?
You can change your nomination whenever you want.
Can an employee contribute to PF even after his retirement?
Yes, if the employee continues to work after reaching the superannuation age, he can contribute to PF
During employment, can an employee discontinue his EPF account?
No, that is not possible.