Employees' Provident Fund (EPF) is a social security benefit that an employee may get after the employment period or at the time of retirement. The article explains Eligibility Criteria, Features, Benefits, Withdrawal Procedure, use of UAN with EPFO Portal, EPF Scheme from both Employer and Employee perspective
Employees' Provident Fund Organisation, India, Ministry of Labour & Employment, Government of India established to manage the social security of the employees
EPFO is one of the world's largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken per EPFO.
Under EPF scheme, an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer. The employee gets a lump sum amount including self and employer's contribution with interest on both, on retirement.
This document covers
As per the rules, in EPF
Contribution is 12% of Total Salary (Basic Salary+DA+Retaining allowances+Conveyance+other allowance+special allowance+LTA+Fixed Cash allowance+Petrol Reimbursement+City Compensatory Allowance).
HRA Calculation needs to be excluded from total salary for PF Computation.
An International worker is any employee who is foreign national working in India under an employer registered with EPFO or an Indian employee who is working in a foreign country with which India has a social security agreement.
EPF is a scheme which was introduced with the sole purpose of helping the people after their retirement, to provide them with a source of the fund once they complete their service in an organisation. EPF schemes provide the option of withdrawal before retirement, however it should be used only as a last resort.
Due to COVID19 pandemic made many lost their jobs and caused financial hardships due to health care crisis in 2020, many opted for early withdrawal of their EPF, this document is supposed to be self-explanatory for withdrawal of your PF in India. In case you need more information or assistance, you may take Tax Consultation Appointment with our Team EZTax.in
Comprehensive table describes when or what events are eligible to withdraw PF? How much one can withdraw at that event? and the Minimum service requirement that one must satisfy?
|Criteria / Reason||Withdrawal Amount||Minimum Service Required|
|1. An individual who retires from employment after attaining the age of 55||Entire amount||-|
|2. Employee can withdraw EPF provided that he person is not less than 54 years old.||90% of the EPF Corpus||-|
|3. Employee is unemployed more than a month||75% of the provident fund||-|
|4. Employee is unemployed more than two months||Remaining 25% of the funds can also be withdrawn.||-|
|5. Wedding: A minimum of 7 years of service is required to be eligible for PF withdrawal||50% of the employee’s share can be withdrawn for marriage purpose||7 years|
|6. Medical purposes: The withdrawal is applicable for the medical treatment of self, spouse, children and parents||Total corpus or six times the monthly salary, whichever is lower from the provident fund for the medical treatment purpose.||no minimum service or lock-in period|
|7. Repayment of home loan: if the house is registered in his or her name or held jointly||90% of the Corpus||3 years|
|8. Renovation and reconstruction of the house: The house should be held in his name or held jointly with the spouse to withdraw EPF amount for renovation.||12 times his monthly salary from his EPF account.||5 years|
|9. Purchase or construction of the house: The property should be held jointly with a spouse or should be registered in the employees name||90% of PF balance||5 years|
EPF withdrawal before the completion of 5 years of continuous service attracts TDS on the withdrawal amount. But, if the withdrawal amount is below ₹ 50,000, no TDS is deducted. Rules related to EPF withdraw before 5 years of service are as follow:
Note: However, now these documents have been replaced by a composite claim form which needs the Aadhar details of the employee
The employer needs to provide following required documents for EPF Registration. Lists of below documents are required.
UAN is a 'Universal Account Number', a 12-digits number that the Employee Provident Fund Organization (EPFO) provides to an Employee. UAN of an employee remains the same throughout life irrespective of the number of jobs one changes. This UAN becomes the identity until his retirement.
Every time an employee switches a job, EPFO allots a new identification number (ID), which will be linked to the UAN of the Employee and the Employer.
Generally, you need to generate UAN only once per PAN. If this is the first time you started using EPFO portal and EPF being deposited by your employer, follow below required documents.
You can get your UAN directly from your Employer. In case, if your employer haven't shared the UAN, you may generate it using the below process
Visit EPFO UAN Portal and Click 'Activate UAN' link on the right-hand side of the browser screen. Fill the information to activate UAN.
Once your log into your account, you may change your password. Once activated, you can easily keep track of your EPF and manage your withdrawals and transfers by logging on to the EPFO website.
Under this, the individuals are not required to get the approval of the employer. Some of the prerequisites for this method are as follow:
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