CS Lily Bali
We all know that provident fund is a welfare scheme for employees and where both employer and employee contribute their part but it’s a liability of employer to deposit whole part. Employer deducted the employee share from the salary of the employee.
PERCENTAGE OF CONTRIBUTION: Both employee and employer are required to make contribution in provident fund.
Employee contribution is 12% of basic pay, dearness allowance, retention money (if any).
Employer contribution is divided into four parts
8.33% in Pension scheme.
3.67% in Provident Fund
0.5% in EPF administrative charges
0.5% in EDLI Contributions.
The interest earned on this investment is also credited in pf account of the employees.
STEP BY STEP PROCEDURE HOW TO WITHDRAW PROVIDENT FUND
♦ Visit to EPFO e-SEWA portal and login your account by using UAN and password
♦ Click on Online service tab → then claim option (Form 31, 19,10C &10D).
♦ Enter bank account details & Confirm term and Conditions.
♦ Select reason for withdrawal : You will only be shown the options for which you’re eligible.
♦ Enter details and upload documents – You would need to enter your complete address, and you may need to upload your cheque/passbook details if you’ve chosen the option for ‘Advance Claim’. You’ll need to accept further ‘Terms and Conditions’ before requesting a one-time password (OTP) for verification.
♦ Get Aadhaar OTP – OTP will be generated on the number linked with you AADHAR CARD.
On entering the OTP, your claim application will be submitted.
Once you’ve submitted your claim, you can track the status of your claims by logging into your Member e-SEWA portal account, under ‘Track Claim Status’.
TAX ON WITHDRAWAL OF PROVIDENT FUND.
No TDS will be deducted if PF is withdrawal after five year of service. Five years of service would include period of employment with previous employer as well.
PF withdrawal before 5 year of Services:-
The employee will be taxed 30% (plus Cess) of TDS of the principal amount and the interest accrued if the PAN is not submitted to the EPFO authorities OR 10% of TDS will be deducted if PAN is furnished.
No TDS in case form 15G/15 H is furnished.
No Tax will be levied even if PF is withdrawal before 5 year of services.
♦ When withdraw funds for medical emergencies or health issues that cannot be avoided.
♦ When your full PF amount is lower than Rs.50,000
♦ When withdraw of PF balance with Form 15G or Form 15H (If you submit PAN, then there will be a TDS at 10%)
♦ When transfer your PF balance from a PF account to another account.
♦ When the employer’s business is withdrawn.
By seeing a current pandemic crisis EPFO department has issued some relaxation in respect of withdrawal.
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