In some situations, including resignation, retirement, unemployment, and termination of service, it is possible to withdraw your PF balance. The Workers' Provident Fund Organization sets the procedures for provident fund withdrawals following resignation (EPFO).
Employees who have been jobless for two months or more are permitted to withdraw the whole balance in their PF account, according to the guidelines. This means those two months after their final day of employment, an employee who resigns from their position may withdraw the whole balance in their PF account.
However, before an employee may withdraw the full amount in their PF account, there are a few restrictions and requirements that must be satisfied. One of the most crucial requirements is that the employee has served the current organization for a minimum of five years.
The employee can only withdraw the amount they contributed to the PF account, without any interest, if they have not yet completed five years of employment.
Eligibility:
If the following requirements are satisfied, an employee may be permitted to withdraw the accumulated balance in their PF account after quitting their job:
The worker must have worked for the current employer for a total of two months.
The employee was required to provide one month's worth of notice, or pay the company the equivalent in cash.
Procedure:
Following a resignation, the PF withdrawal process is as follows:
Send Form 19 to the existing employer: Sending Form 19 to the current employer is the first step towards withdrawing the PF balance. The EPFO website or the nearby EPFO offices both sell this form. An employee must sign the paperwork and deliver it to their present employer along with a voided check or a bank passbook.
Transfer of PF Account: If an employee has switched employment and has a number of PF accounts, they may transfer funds from one of those accounts to another. To accomplish this, send Form 13 to the existing employer.
The present employer will check the information after the form is received and will then authorize the withdrawal request. After submission, the procedure could take up to 20 days.
Payment of PF Withdrawal Amount: After the withdrawal request has been authorized, the employee's bank account will be credited with the accrued sum in their PF account. From the date of approval, the payment may take up to 30 days to arrive.
Exceptions:
With certain restrictions, employees may withdraw their PF balance before having served for five years straight. The following is a list of these exceptions:
Illness: An employee may withdraw funds from their PF balance if they have a serious sickness and need money for medical care.
Financial hardship: An employee may withdraw money from their PF balance if they need the money to cover urgent expenses.
Disability: The employee may withdraw their PF balance if they are chronically disabled and are unable to work.
If the employee still needs to fulfill five years of continuous service with the current employer, the withdrawal of the PF balance is taxed. In accordance with the current tax legislation, the tax is withheld at the source.
Decrease in Retirement Benefits: If the EPF balance is withdrawn before the employee has worked for five years continuously, their retirement benefits will be reduced.
Future Contributions: If an employee withdraws their EPF balance before accumulating five years of continuous service, it will also have an influence on their future EPF contributions.
If an employee has completed two months of continuous employment and given a one-month notice period, or paid the employer the equivalent sum, they are eligible to withdraw their remaining PF balance. Form 19 must be submitted, the PF account must be transferred if necessary, and the withdrawal request must be approved before it can be made.
If the employee still needs to fulfill five years of continuous service with the current employer, the withdrawal sum is taxable. In the event of illness, hardship, or incapacity, there are exceptions to the rule.
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