What is EPF? How you can withdraw it in case of need?

New Delhi, Aug 21: Just as little drops of water make up the mighty ocean, so to do little savings build a big lump sum by the time you retire from your profession. Contributing some amount from your monthly salary might not have much of an impact for you now, but it will make a big difference at the end of your career as it gives a peace of mind with a stable bank balance.

And Employees' Provident Fund, which was earlier known as Provident Fund (PF), is one place to safely park your money. What is EPF? Can you withdraw the amount? All your questions have been answered here:

What is EPF?
It is a scheme backed by the Indian government. The purpose is to provide employees with lump sum payments at the time of retirement or when they exit from their place of employment.

It is one of the main platforms of savings for all employees working in government, public or private sector organizations. It is now referred to as the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 which extends to the whole of Indian except Jammu and Kashmir.

Why EPF?
The primary purpose of EPF fund is to help employees save a fraction of their salary every month so that they can use the same in an event that the employee is temporarily or no longer fit to work or at retirement.

A person starts his contribution to the EPF fund once he joins a company as an employee. The contributions are made on a regular basis.

Employers and employees both contribute 12 per cent of wages in contribution accounts. Further, the employers also contribute towards the administration of the benefits under the EPF & MP Act.

What are the benefits of EPF?
Employee Provident Fund is a very important investment for the necessities of our future. The tax-free interest and the maturity award ensure a very good growth to your money. If the PF money continued for a very long period of time, it can help in meeting employees' requirements including his retirement goals.

While an employee's own contribution to the EPF account is not taxable, the employer's contribution to the EPF account can become taxable if it exceeds Rs 7.5 lakh in a financial year.

One good part of the product is it covers three different objectives - wealth generation for retirement, employee pension scheme and life insurance cover with Employee Deposit Linked Insurance Scheme. These members will get the benefits without registering separately.

Can you contribute more than the statutory rate of 12 per cent?
Yes. The member can pay a voluntary contribution in excess of his normal contribution of 12 per cent of Rs.15000. The total contribution i.e., voluntary and mandatory can be up to Rs 15,000, per month. (The employer may restrict his own share to the statutory rate). The member can also contribute on higher wages greater than 15000 after getting permission from APFC/RPFC as per the provisions of para-26(6) of the Scheme.

Is there any time limit for withdrawal of Provident Fund dues?
Only in the case of resignation from service (not superannuation) a member has to wait for a period of two months for withdrawal of the PF amount.

On submission of PAN: If 15G/15H is submitted, no TDS is deducted. If 15G/15H is not submitted, TDS is deducted at 10 per cent.

Non Submission of PAN: TDS is deducted at the Maximum Marginal Rate (34.606%)

No TDS deducted in case of: Transfer of Fund Payment of advance Service is terminated by employer beyond the control of the employee.

How are interest credit for the EPF members?
The compound interest is credited on monthly running balance basis at the statutory rate declared for each year.

The government reviews the interest rate on EPF accounts on a regular basis. For the financial year 2021-22, the government has approved 8.1 per cent rate of interest on the EPF deposits for 2021-22 - an over four-decade low - for about five crore subscribers of the retirement fund body EPFO.

What is UAN?
Universal Account Number (UAN) is a 12-digit number allotted to each subscriber by linking it to the member's currently active PF account number (from 31/07/2014 to 30/11/2016). From 12/2016 any new member has to be allotted a Universal Account Number linked to the establishment's code number.

How to withdraw PF money from EPFO?
People can withdraw their amount online. Here is a step-by-step guide:

Step 1: Log into EPFO portal: https://unifiedportalmem.epfindia.gov.in/memberinterface.

Step 2: Enter your UAN number and password along with captcha for verification.

Step 3: Click 'online services' and select Claim (Form-31, 19 & 10C).

Step 4: Enter the last 4 digits of your bank account number and click YES.

Step 5: Sign the certificate and proceed for Online Claim.

Step 6: From the drop-down menu to select the claim you require under the tab 'I Want To Apply For'.

Step 7: Enter the amount you want to withdraw and upload the scanned copy of the cheque.

Step 8: Enter your address and click on Aadhaar OTP.

Step 9: Submit the 4-digit OTP number and click on Claim.

Step 10: Then the message will be sent to your employer and once the company accepts you will receive the money in your bank account in 15-20 days.

How to avail loan?

EPF Member can apply for withdrawal up to 90 per cent PF accumulations in their account. However, the withdrawal is allowed only once if the member is in the service for three years with a minimum PF balance of Rs 20,000 individually or including that of spouse who is also a member of Fund.

The loan will be given for purchasing dwelling houses/flats, construction of dwelling houses including acquisition of a suitable site.

Also, a member can take loan for medical treatment, wedding and education.

How to apply for EPF loan online? Step-by-step Guide

• Log in to UAN website: https://unifiedportal-mem.epfindia.gov.in/memberinterface/
• Enter your credentials like ID, password and captcha.
• In the top menu, click on 'Online services'.
• From the dropdown menu, select the option of 'Claim (Form-19, 31 & 10C).
• You will be next show all the details
• On this screen, you need to enter the last 4 digits of your bank account number and click on 'Verify'
• Sign the Certificate of Undertaking by clicking on 'Yes' and proceed with the steps
• Now, to withdraw your funds online, you need to select the 'PF Advance (Form 31)' option
• You will be next asked to select the 'Purpose for which withdrawal advance is required'
• In the same section of the form, you will be asked to enter the withdrawal amount along with the employee's address.
• After entering the details, ensure to tick mark on the certification to finally submit your EPF withdrawal application.
• You might be asked to submit scanned documents depending on the purpose of your withdrawal.
• After completing all the formalities, click on 'Get OTP'
• Enter the OTP sent to your registered mobile number and your request will be submitted.