How To Withdraw PF Online? (& Why You Shouldn't)
Provident Fund is a retirement scheme which is given to all the salaried employees in both public and private companies. This concept was first introduced in 1952 by the central government of India where any company that had 20 or more employees had to register under EPFO (Employees Provident Fund of India).
The two types of PF accounts are:
#1. EPF (Employee Provident Fund) -
It was first introduced to people who are salaried. Any employee who is working for a company has to contribute 12% of his/her basic salary to the EPF account. EPF account interest is tax-free.
#2. PPF (Public Provident Fund) -
PPF is mainly for the public like housewives, business owner, self-employed people etc. It’s a 15 years scheme where you have to deposit a minimum of 500 rupees to a maximum of 1.5 lacs rupees annually or 12 monthly installments in order to avoid any extra penalty. In order to gain more interest in your PPF investment, it's better for you to deposit more amount of money.
(Also Check 3 High Cost Traps To Avoid While Investing)
How to calculate PF amount?
For the Employee Provident Fund
An employee’s 10%-12% generally goes to the EPF scheme of his basic salary. The current EPF interest rate is 8.55 %. For the year 2016-17, it was 8.65% whereas in 2015-16 it was 8.80%.
EPF is calculated every month but is deposited in your account only after the end of the financial year. It goes like this:
For instance, your basic salary +dearness allowance = 20000/-
Employee’s contribution will be 12% of 20000/- which is 2400/-
So, the interest is calculated on your basic salary i.e. 20000 so, 8.55% of 20000 is 1710/-
Now, Employer’s contribution in the EPF= Employee’s contribution-Employer’s contribution towards EPS i.e. 690/-
The total EPF contribution per month = 2400+690= 3090/-
The interest rate that applies every month for calculating the interest is 8.55%/12= 0.7125%
For instance, if you assume the employee joined the organization around April 1st, 2018 the contribution of the same starts from the financial year of 2018-2019 to the Public Provident Fund
The current PPF rate is 8% for this quarter. It is revised after every quarter. PPF interest is compounded on an annual basis so, for instance, the current 8% interest on your saving of 8 lacs will be 8000/- so the amount comes to 1,08,000, now, the interest for another year will be calculated on 1,08,000 rupees, not on 1,00,000.
Not all the banks are eligible to offer PPF accounts except a few like, Axis, ICICI, HDFC is some of the private sector banks that offer PPF service. Whereas Public sector banks like SBI, PNB, CANARA, UCO etc are the banks that offer PPF service.
What is UAN?
Universal Account Number is allotted by EPFO. As the name suggests, it is a universal number for multiple members that is allotted to an individual, with the help of UAN multiple member ids can be allotted under single member. UAN number helps you in keeping track of your PF account without visiting the bank every now and then. It is a 12 digit number that is linked to your PF account. Do remember that UAN number is not your PF number, but it is an identity of your PF account.
How to check the balance?
Need help with checking your PF balance – Here’s what you need to do:
#1. EPFO Portal
If you have a Universal Account Number (UAN) you can directly log in to the EPFO portal and go to the tab ‘Our Services’
Select the option that says, ’For Employees’ from the drop-down menu.
Click on the option ‘Member passbook’ under the option ‘services’.
It will take you to a login where you have to put your UAN number and password and after logging in, you can access your EPF account details and balance.
#2. Umang App
With the help of Umang App checking your PF balance on your handheld device has become easier than ever. It was launched by the government of India last year. From EPF passbook to raise claim and track claims, it allows you to view at one place. All you need is a one-time registration using your mobile number.
#3. SMS service
If your UAN is registered then you can access your latest contribution details of the PF by sending SMS to the number 7738299899. You need to send the message with a body: EPFOHO UAN ENG. The letter ENG is language preference that you want for your message. There are other language options including but not limited to Telugu, Gujarati, Marathi, Kannada, and Bengali.
If you want the message in Hindi, then you need to type EPFOHO, UAN HIN.
#4. Missed Call Service
If your UAN and KYC are integrated then you can give a missed call at the number 011-22901406 from your registered mobile number and after that, you will get SMS with the PF details.
How to withdraw PF online with UAN
Here the steps how you can withdraw your Provident Fund with UAN.
- Go to the official website of www.epfindia.gov.in
- Moving further you will find an icon saying ‘Our Services’ on the left top of the menu bar on the website and select ‘For Employees’
- You will find another option below with ‘Member UAN/Online services.' After clicking on that you will be redirected to a new browser.
- Log in to the portal with your UAN number and password.
- Click on the option of ‘Online services’
- Select Form 31, 19 & 10C
- Now you have to authenticate your KYC after doing so, you will receive an OTP which will take you to the withdrawal EPF claim form.
- Once the form is submitted, you will receive a copy of confirmation into PDF form, keep it securely.
How to withdraw PF from the previous employer?
Many companies will ask for a properly filled withdrawal form along with a canceled cheque in order to process your PF request via EPF office. The procedure involves getting in touch with your previous employer. If you are trying to do this online then you need to follow these simple steps:
#1. Go the official website of EPFO and click on the column of ‘My Services’. There you can select the option ‘For employees’, you will then find another option ‘Member UAN/Online Service’.
#2. It will direct you to a new tab where you need to log-in in your PF account with UAN Number and Password.
#3. After logging in, click on the option ‘View’ and select ‘Service History’ and there you can see your previous companies PF Number.
#4. Copy that PF Number and select the option ‘Online Service’ and select the ‘One Member-One PF account transfer request’.
#5. You will be provided with an application form that will help you in transferring your previous PF amount to your current PF account.
#6. The form is already prefilled with all the necessary details you need just recheck it in case it requires any changes.
#7. In step 1 you need to fill your previous companies PF number and details and click on the button ‘Get Details’, there you can find all the necessary updates and details of your PF account.
#8. In step two you have to select the button of ‘Get OTP’. Click on the button to receive the OTP.
#9. Mention that OTP in the box next to ‘Send OTP’ and submit and the claim will be successful. (Sometimes there can be errors in the server and OTP extraction so try early morning).
The process is very easy if you have the UAN number. The whole process can be completed online.
How to check PF claim status?
In order to check your PF claim status applied either online or offline. It can also be checked via the EPFO online portal. The claim status gets updated on the website within 2-3 days.
#1. Go to the official website www.epfindia.gov.in.
#2. Place the cursor on ‘our Services’ Click on option ‘For Employees’.
#3. Then you will be guided further and you can find an option as ‘know your claim statuses’. Click on the option, and you will reach the portal where you can check your claim status.
#4. You have to enter your UAN number and mention the captcha and click.
#5. You will now have to select your PF account number from the drop-down column and click on ‘View Claim Status’
#6. And there you can see all your claim details & status.
How to close PF Account?
The closing and opening of PF accounts are not similar to the bank accounts. The withdrawal is allowed only after the period of five years and if you need it urgently it is done as a loan claim and needs to be realized.
It can be closed in two situations:
- Either the employee is dead.
- Or he/she has left the job from the company.
So, in case you have resigned from your previous job and now want to claim your PF fund then you need to sign a proposal of closure in the provided format and send it to the EPF regional office via your employer. The regional office will verify all the entries and will close your account and release the balance and interest applicable to your account. In case your company is not processing the procedure of releasing your money then you can issue a petition of grievance as a reminder for the company to do the needful.
As we have discussed all the necessary aspects of Provident fund’s meaning, interest, online withdrawals, and claims. We must know what is the advantage of having a Provident Fund? Below we are describing some of the points-
#1. Income tax Exemption - If you have a PF account you are liable for an exemption from income tax. It is like an investment in your earning where you are given a fixed interest on your basic income. The longer it is the better the profit margin. It’s better if you withdraw it once you retire.
#2. You can receive insurance benefits up to Rupees 6 lakh under the ‘Employees’ deposit linked insurance scheme.’
#3. If you are contributing for more than 10 years it ensures you a life-long pension under Employees’ Pension scheme 1995.
#4. If your Adhaar is linked with the UAN number, in case of job change you can transfer your EPF account very easily. With the help of this new employees are not required to file separate EPF transfer using Form-13, it will now be done automatically.
#5. You are entitled to avail the facility of withdrawal for the purchase of a house, construction of the home, illness, higher education, marriage and so much more.
#6. In case of uncertain death, the family is entitled to receive the provident fund money or to the nominee mentioned by the member. The nominee is generally determined by the details provided by the member in FORM-2
(Check out - 8 Steps To Becoming A Financially Wise Woman)
Points that need to be considered in PF-
Even after contributing for years most of the EPF members do not reach to the milestone of 1 crore. According to research done by Economic times, 13% of the employees withdraw their PF amount every time they leave the job. This hinders the productivity of the fund in two very important ways:
- The withdrawal is done for voluntarily in order to contribute in the personal expenditure this leads to the retirement savings to be zero.
- If an individual withdraws the amount of Provident fund before the completion of the five-year term the amount becomes taxable.
- Now many a time it is possible that your details are wrong while you are applying for withdrawal of your EPF account but then this confusion is very normal, so rectify the mistake within the time possible, as it might cause the delay in your withdrawal claim.