The Indian government will pay the employer and employee contribution to EPF account of employees for the coming up three months from June to August 2020. The benefit is for establishments which up to 100 employees and where 90 percent of those staff who draw a salary of less than Rs 15,000 per month. Among non-governmental organizations, the donation to the EPF is decreased to 10 percent from 12 percent.
EPF (Workers’ Provident Fund), also known as PF (Provident Fund), is a mandatory pension and insurance plan for qualifying the organization’s employees. The aim of this fund is to be a pool on which workers will fall back into their retirement lives. According to the EPF norm, every month workers will spend 12 percent of their basic pay. The Employer always pays a similar number. Annually, the balance invested in the EPF accounts collects interest. After retirement, employers may remove the whole amount accrued in their EPF. Premature withdrawals, though, maybe allowed by satisfying other requirements that are discussed in this post. This will be important to remember here that the Provident Fund Organization of Employees has assigned UAN, i.e. the mandatory Universal Account Number for all workers protected by the PF Act. The UAN will be connected to an EPF plan of the employee. The UAN is available during an employee’s career, so by the point of work transaction, there is no requirement to register for EPF.
1. When can EPF be withdrawn
Someone can opt to suspend EPF in full or in part. In any of the following conditions, EPF can be withdrawn entirely
a. When one person retires
b. If an individual stays unemployed for more than two months. The persons must procure an attestation of the same from a gazetted agency to allow withdrawal on this situation.
Although moving employment after being unemployed for two months or longer (i.e. during the transitional time of changing jobs), the full removal of EPF is contradictory to the PF rules and regulations and is thus not allowed.
In certain situations and according to the specified requirements which were addressed in brief below, partial elimination of the EPF could be effected:
In certain situations and according to certain specified requirements which were addressed in brief below, partial elimination of the EPF could be effected:
|Sl. No.||Particulars of reasons for withdrawal||Limited for withdrawal||No. of years of service required||Other condtheions|
|1||Medical purposes||Six times the monthly basic salary or the total employee’s share plus interest, whichever is lower||No criteria||Medical treatment of self, spouse, children, or parents|
|2||Marriage||Up to 50% of employee’s share of contribution to EPF||7 years||For the marriage of self, son/daughter, and brother/sister|
|3||Education||Up to 50% of employee’s share of contribution to EPF||7 years||Etheher for account holder’s education or child’s education (post matriculation)|
|4||Purchase of land or purchase/construction of a house||For land – Up to 24 times of monthly basic salary plus dearness allowance For house – Up to 36 times of monthly basic salary plus dearness allowance, Above limits are restricted to the total cost||5 years||i. The asset, i.e. land or the house should be in the name of the employee or jointly wtheh the spouse.
ii. The can be wthehdrawn just once for this purpose during the entire service.
iii. The construction should begin wthehin 6 months and must be completed wthehin 12 months from the last wthehdrawn instalment.
|5||Home loan repayment||Least of below: Up to 36 times of monthly basic salary plus dearness allowance Total corpus consisting of employer and employee’s contribution which interest. Total outstanding principal and interest on housing loan||10 years||i. The property should be registered in the name of the employee or spouse or jointly wtheh the spouse. ii. Wthehdrawal permtheted subject to furnishing of requisthee documents as stated by the EPFO relating to the housing loan availed. iii. The accumulation in the member’s PF account (or together wtheh the spouse), including the interest, has to be more than Rs 20,000.|
|6||House renovation||Least of the below: Up to 12 times the monthly wages and dearness allowance, or Employees contribution which interest, or Total cost||5 years||i. The property should be registered in the name of the employee or spouse or jointly held wtheh the spouse.
ii. The facilthey can be availed twice:
a. After 5 years of the completion of the house
b. After the 10 years of the completion of the house
|7||Partial withdrawal before retirement||Up to 90% of accumulated balance which interest||Once the employee reaches 54 years and withdrawal should be within one year of retirement/superannuation|
2. Procedure for EPF withdrawal
Broadly, EPF withdrawal can be effected either by:
- Submission of a physical application for withdrawal
- Submission of an online application
1. Submission of a physical application
For this, one can download the new compost here claim (Aadhaar)/compost here claim form (Non-Aadhaar) from here :
The new compost here claim form (Aadhaar) may be filled out and submitted to the respective EPFO office without the employer’s attestation, while the new compost here claim form (Non-Aadhaar) shall be filled in and submitted to the respective EPFO office which the employer’s attestation. The might be noted that in the situation of an employee’s partial withdrawal of the EPF sum for varying situations as mentioned in the above chart, quite recently the obligation to supply various certificates have been alleviated and the EPF subscribers have been given the option of self-certification. (Please refer to the EPFO order dated 20.02.2017 for information by clicking here)
2. Submission of an online application for EPF Withdrawal
Ironically, the EPFO recently developed the online withdrawal the facility which rendered the whole process more convenient and therefore less time-consuming.
To order the withdrawal of EPF online through the EPF scheme, must ensure that the following requirements are met:
- The UAN (Universal Account Number) is activated & the telephone number used to access the UAN is in the working state.
- UAN’s linked to the KYC, i.e. Aadhaar, PAN and bank data followed by the IFSC mark.
When the requirements above are fulfilled, then the obligation of the former employer’s attestation to carry out the termination of the procedure will be removed.
Steps to apply for a withdrawal of online:
Step 1: Go to the UAN portal by clicking here.
Step 2: Login which the UAN and password and enter the captcha.
Step 3: Then press on the ‘Manage’ tab and pick KYC to verify whether or not the KYC data, such as Aadhaar, PAN, and bank information are right.
Step 4: After the details of KYC are verified, go to the tab of ‘Online Services’ and select the option of ‘Claim (Form-31, 19 & 10C)’ from the drop-down menu.
Step 5: The ‘Claim’ screen shows information of the member, KYC data, and other specifics of the service. Enter the bank account’s last four digits and press ‘Verify.’
Step 6: Click on to ‘Yes’ to sign the certificate of the undertaking and then proceed.
Step 7: Now, click on to ‘Proceed for Online claim’.
Step 8: Pick the application the want under the ‘I Want To Apply For’ tab in the petition form, i.e. complete EPF the settlement, EPF portion withdrawal (loan/advance), or pension withdrawal. If, due to the service requirements, the user is not available for any of the programs, such as PF withdrawal or pension withdrawal, then that alternative will not appear in the drop-down menu.
Step 9: Instead, to withdraw the contribution, pick ‘PF Advance (Form 31).’ In addition, indicate the intent of such advance, the sum needed, and the address of the employee.
Stage 10: Tap on the credential and apply. They can be required to request scanned documents for the purpose of filling out the application form. The boss will have to accept the request for deduction and then they’ll only earn payments through their bank account. The typically takes 15-20 days for the funds to be credited to the bank account.
3. How to Apply for the loan of Home Based on EPF Accumulation?
Depending on the EPF account balance, the should follow the instructions given below to apply for a home loan:
Step 1: Apply to the EPF Commissioner for a home loan through the housing society in the format set out in Annex 1.
Step 2: The Commissioner must give a certificate specifying monthly payment for the past three months to the EPF portfolio. So there, the should take a scanned copy of the EPF passbook to display the donations over the last three months.
Step 3: The can choose to shell out a lump sum or increments.
Step 4: EPFO makes the charge directly to the housing service.