Now, members and subscribers can withdraw Rs 1 lakh from their PF account instead of previous limit of Rs 50,000. Union Labour minister Mansukh Mandaviya announced this earlier this week on the occasion of the government’s 100 days in office.
The Employees’ Provident Fund Organisation (EPFO) oversees various employee-related schemes, such as provident fund, pensions, and insurance for employees within the organised sector. One of the primary schemes managed by the EPFO is the Employees’ Provident Fund (EPF) scheme. The government has now eased regulations and has hiked the one-time withdrawal limit from provident fund (PF) accounts.
Besides, the government has also relaxed the rules, allowing employees to leave their jobs within the first six months of starting a new position. This adjustment, as described by Minister Mandaviya, intends to provide enhanced financial flexibility to contributors during times of immediate requirement.
Mandaviya said: “If you are an EPFO contributor and there’s a family emergency, you can now withdraw a higher amount. The one-time withdrawal limit has been raised.”
He added: “Previously, you had to wait longer, but now, PF contributors can withdraw even in the first six months… it’s their money,” adding that these updates were introduced within the first 100 days of the new government’s term.
The minister further noted the government’s efforts to enhance EPFO operations, aiming to minimise challenges for subscribers.
He announced the introduction of a new digital framework that simplifies the withdrawal process, ensuring faster access to funds.
Provident funds, such as EPFO, play a crucial role in providing retirement income for more than 10 million employees in the organized sector. These funds serve as the primary source of lifetime savings for working individuals, particularly the salaried middle class. The interest rate on savings, currently set at 8.25% for the financial year 2024 by EPFO, is a key indicator closely observed by stakeholders in the realm of retirement planning and financial security.
“Withdrawal from PF is typically towards specific needs such as medical treatment, education, or family needs. Early access and an increase in cap specifically for medical reasons is likely to be welcomed by employees,” said Preeti Chandrashekhar India Business Leader, Health and Wealth, Mercer.
Withdrawal of PF amount
On April 16, 2024, the Employees’ Provident Fund Organization (EPFO) released a circular announcing an increase in the PF partial withdrawal limit for auto claim settlements related to medical treatment. The limit was raised from Rs 50,000 to Rs 1 lakh.
When discussing the circumstances under which you may withdraw from your Provident Fund (PF), it is important to note that withdrawals are typically permitted for situations such as medical emergencies, marriage expenses, educational needs, unemployment, home renovations, and other valid reasons.
Commencing from the financial year 2021-2022, the interest earned on an employee’s contribution to an EPF account exceeding Rs. 2.5 lakh during a financial year is considered taxable income for the employee. This taxable interest is also subject to Tax Deducted at Source (TDS) under section 194A.
To withdraw PF online, you will need to provide the following documents:
> Universal Account Number (UAN): This unique identification number is essential for online PF transactions.
> Bank account details of the EPF subscriber: Make sure to have accurate bank account information to receive the withdrawal amount.
> Identity and address proof: Provide valid documents such as Aadhar card, PAN card, or passport for verification purposes.
> Cancelled check with IFSC code and account number: This verifies your bank account details and facilitates the smooth transfer of funds.
Steps to withdraw PF account
> Visit the UAN portal.
> Log in securely by using your UAN (Universal Account Number) and password. Make sure to enter the captcha correctly before clicking on the ‘Sign In’ button to validate your access.
> Verify your KYC details by logging in, selecting the ‘Manage’ tab, and choosing ‘KYC’ from the menu. It is essential to ensure that your KYC information, including Aadhaar card, PAN, and bank details, are up-to-date and verified.
> Start the claim process by moving to the ‘Online Services’ tab after KYC verification. Locate the option ‘Claim (Form-31, 19, 10C, and 10D)’ and select it to begin the process.
> Double-check your member details on the following screen, which will display your KYC information and other relevant service details. Input your bank account number and click on ‘Verify’ to confirm the accuracy of the provided information.
> To proceed with the online claim, you must agree to the Certificate of Undertaking by clicking on ‘Yes’. This step is mandatory to continue further.
> Click on ‘Proceed for Online Claim’ to move to the next step in the claim process.
> In the claim form, specify the type of claim you wish to file under the ‘I Want To Apply For’ tab. Options include full EPF settlement, EPF partial withdrawal (loan or advance), or pension withdrawal. Please note that the availability of these options is subject to your eligibility based on service criteria.
> For claims such as PF Advance (Form 31), provide information on the purpose of the advance, the desired amount, and your current address.
Finalise your application by clicking on the certificate button. Depending on the nature of your claim, you may need to upload scanned documents related to your application’s purpose.
Other updates
In another significant update, it has been announced that pensioners covered under the Employees’ Pension Scheme (EPS) 1995 can now conveniently access their pensions from any bank branch nationwide. The Centralised Pension Payment System (CPPS) set to commence operations on January 1, 2025, aims to streamline the pension disbursement process for over 78 lakh pensioners.
Under this government-approved scheme, retired employees are not required to transfer their Pension Payment Orders (PPOs) in case they wish to change or move banks, thus offering enhanced flexibility and convenience.
This development marks a pivotal step towards modernising the Employees’ Provident Fund Organisation (EPFO) and improving the welfare of pensioners. The Minister highlighted that the implementation of CPPS will ensure a seamless and hassle-free experience for pensioners, enabling them to receive their pensions effortlessly from any bank branch in the country.