In India, a fixed amount of money, 12%, is deducted from an employee’s salary every month and deposited in an EPF account along with a matched contribution by the employer.
This is a retirement savings scheme, for corporate employees, mandated by the government known as the Employees’ Provident Fund. It is a collective pool of funds of all employees in a company.
EPF is managed by the Employees' Provident Fund Organisation which is affiliated with the Government of India
How does EPF work?
The fund earns interest and acts as a safety net for employees to fall back on after retirement. An employee can withdraw the entire sum warranted to him/her, after retirement or after two months of being unemployed. However, after the coronavirus pandemic hit the country, the conditions for premature withdrawal have been relaxed by the government.
Partial withdrawal is allowed up to 75% in various situations such as in case of a medical emergency, higher education of children, etc. Nevertheless, withdrawals are subject to conditions and one should ensure that his/her demand meets the conditions before applying for withdrawal.
Steps to withdraw
Before starting, it should be confirmed that your Universal Account Number (UAN) associated with your EPF account is activated. Aadhaar number and bank account should also be linked with UAN.
The first step is logging on to EPFO’s e-sewa portal using UAN & password followed by filling in the details in the online form “Claim (Form-31, 19, 10C & 10D)”. This form can be found in the online services menu. Verify the details after entering your bank account number.
The next step is to agree to the “Certificate of Undertaking” or the terms and conditions of making the transaction.
As you proceed with the option for making the claim online, you will be required to answer a few questions. The question prompt generally wants you to answer whether the withdrawal is premature. And if it is, one has to state the purpose behind the withdrawal. You would be required to submit scanned documents to substantiate your purpose
After entering the amount required or the amount you wish to take out, you will receive an OTP on your Aadhaar registered mobile number. After authenticating OTP, you can submit your request.
The status of the claim can be tracked on the portal itself. It usually takes 2-3 weeks for the request to be approved and the money to be transferred to one’s bank account.
Premature withdrawal under EPF is subject to various conditions and one must meet them to be able to receive a partial refund. In case of a financial emergency, EPF acts as a safety net and can be relied upon.