Employee Provident Fund (EPF) New Rules That You Should Know

epf new rules

The Employees' Provident Fund Organisation (EPFO) provides a compulsory savings plus retirement scheme for employees, known as the Employees' Provident Fund (EPF). The organisation is responsible for regulating and managing provident funds in India under the Ministry of Labour and Employment. In May 2024, the organisation declared EPF new rules to make things easier for EPF members. The major changes include faster death claims, multi-location claim settlement, and extended auto-settlement facility.

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PF Withdrawal Rules 2024

The EPFO has listed several withdrawal rules to avoid premature exits. They encourage subscribers to stay invested in the scheme:

  • Any withdrawal made before completing five service years is taxable, including principal and interest.
  • Withdrawals after completing five years of services are tax-exempted.
  • If the employee loses a job due to ill health, the withdrawal is tax-exempted.
  • Fund transfers from PF to NPS account are tax-exempted.
  • In case of a job shift, the process is considered as continuous service.
  • Employees must use composite claims to partially withdraw or finally settle a claim.

Read Also: What is PF(Provident Fund)? How is PF Calculated on Salary?

New EPF Withdrawal Rules 2024

The EPFO's new guidelines aim to avoid premature withdrawals by encouraging members to stay invested in the scheme. Moreover, they make PF fund access easier for subscribers during financial emergencies:

  • Auto-Settlement Facility: The EPF rules facilitate auto-settlement for housing under Rule 68B. Rule 68K also provides auto-settlement for marriage and education. Additionally, EPF's new rules 2024 extend the auto-settlement facility for medical conditions under Rule 68J.
  • Multi-Location Claim Settlement: The EPFO has set up a link office for multi-location claim settlements. Its primary aim is to minimise delays in settling claims across India.
  • Faster Death Claims: In death cases, physical claims without Aadhaar seeding will be possible temporarily. However, the OIC must confirm the deceased person's membership and the claimant's genuineness.

Read Also: Learn about your and your employer's EPF contributions

PF Withdrawal Procedure

According to the EPF withdrawal new rules, employees do not require the employer's attestation for PF withdrawal if they seed their Aadhaar card details with their UAN account. They can make a withdrawal claim online on the EPFO member portal, or offline by following the steps mentioned below.

Steps for EPF Withdrawal Online

  1. Visit the EPFO portal at https://www.epfindia.gov.in/
  2. Choose 'For Employees' in the 'Services' tab
  3. Click on the 'Member UAN/Online Service (OCS/OTCP)' option
  4. Log in to the portal after entering your UAN, password, and captcha code
  5. Click 'KYC' under the 'Manage' tab
  6. Find the 'Digitally Approved KYC' section and check that your KYC details are correct
  7. Click 'Online Service'
  8. Click 'CLAIM (FORM-31, 19 & 10C)'
  9. A new page will appear where you will find an automatically generated online claim form
  10. Enter the last four digits of your registered bank account number
  11. After verification, the system will generate a 'Certificate of Undertaking'
  12. Click 'Yes' to proceed
  13. Select 'PF ADVANCE (FORM - 31)'
  14. Select a reason for the claim from the drop-down
  15. Submit your withdrawal application
  16. Upload some scanned documents
  17. After the employer's approval, the withdrawal amount will reach your bank account and you will receive a notification by SMS

Read Also: EPF Balance Check Online on Mobile, SMS, Call, Umang App

Steps for EPF Withdrawal Offline

Those who are not very comfortable with the online process may withdraw their EPF funds offline:

  1. Visit your respective EPFO office
  2. Request a Composite Claim Form
  3. Fill out the form carefully and submit it at the office with relevant documents

There are two types of Composite Claim Forms: Aadhaar and Non-Aadhaar. The Aadhaar form requires the employer's attestation. The non-Aadhaar does not require attestation from the employer. After filling out the relevant form, you must submit it to your jurisdictional EPFO office.

Documents Required for PF Withdrawal

Furnish the following documents to claim withdrawal under the EPFO's new pension rules:

  • Composite Claim Form
  • Address Proof
  • Identity Proof
  • Two revenue stamps
  • Bank account statement in the EPF holder's name
  • One blank and cancelled cheque with visible IFSC and account number
  • Personal details like Father's Name and Date of birth
  • ITR Forms 2 and 3 for EPR withdrawals before completing five years of continuous service

Tax-Free Limit for PF Withdrawals

While a part of the employee's salary contributed to the EPF is tax-exempt, certain rules still apply to the taxation rules:

  • If the employee withdraws more than Rs 50,000 before five years of continuous service, it will attract 10% TDS after providing PAN. Otherwise, 30% TDS plus tax is applicable.
  • No TDS deduction after providing Form 15G/ 15H
  • No TDS deduction if the employee withdraws after completing five years of continuous service
  • No TDS deduction for EPF funds transfers to NPS

Types of PF Withdrawals

  1. PF Final Settlement

    An EPF member can withdraw 100% of the corpus only at retirement. They can also transfer funds from their EPF account to their NPS account to receive a regular pension. However, 100% PF corpus withdrawal is also possible if the person stays unemployed for over two months.

  2. PF Partial Withdrawal

    Partial withdrawals are permissible only for certain unavoidable reasons such as medical emergencies, weddings, home loan repayment, home renovation, or unemployment below two months.

  3. Pension Withdrawal Benefit

    EPF has an EEE status, which means all contributions, withdrawals, and earnings are tax-exempted. However, TDS is deductible upon premature EPF funds withdrawal.

Criteria for PF Withdrawal

When An Employee Is Still Under Service

  • Submit composite claim form for taking advance from the PF account
  • Submit Form 14 for financing LIC policy through the PF account
  • Claim pension fund after crossing 58 years of age
  • Submit form 10D to receive a monthly pension after completing ten service years
  • Submit a composite claim form if ten years of service are not yet complete

When An Employee Switches Job

  • Submit Form 13 for EPF account transfer
  • If the employee leaves a job but does not join another
  • Use a composite claim form to make a pension fund claim
  • After 58 years of age, make a PF claim using a composite claim form and form 10D after completing ten service years

When An Employee Leaves An Establishment Due To A Physical Disability

  • Use a composite claim form to claim the PF
  • Use Form 10D to make a pension claim
  • After 58 years of age, make a PF claim using a composite claim form without completing ten service years

When An Employee Is Deceased While In Service

  • Before 58 years, the nominee, heir, or beneficiary can claim PF settlement using Form 20, EDLI using Form 5IF, and monthly pension using Form 10D
  • After 58 years and completing ten service years, the nominee, heir, or beneficiary can claim using relevant forms
  • After 58 years but not completing ten service years, the nominee, heir, or beneficiary can claim using relevant forms

When An Employee Is Deceased

  • Before 58 years, the nominee, heir, or beneficiary can claim PF settlement using Form 20 and pension amount using Form 10D
  • After 58 years and completing ten service years, the nominee, heir, or beneficiary can claim using relevant forms
  • After 58 years but not completing ten service years, the nominee, heir, or beneficiary can claim using relevant forms

Reasons for PF Withdrawal

EPF members can withdraw their corpus partially or completely only under certain conditions. They must specify their reason for PF withdrawal to comply with the EPF withdrawal new rules:

  • Medical emergency
  • Home loan Repayment
  • Wedding
  • Home Renovation
  • Unemployment

Limits of EPF Partial Withdrawal

PurposeWithdrawal Limit
Medical emergencyTotal corpus or six times the monthly salary, whichever is lower
Home loan RepaymentUp to 90%
WeddingUp to 50%
Home Renovation12 times the monthly salary
Unemployment75% after one month of unemployment
25% after 2nd month of unemployment
Retirement100%

Can I Withdraw EPF for Planned or Unplanned Expenses?

EPF withdrawals are strictly allowed for specific purposes, such as home purchase or construction, wedding, medical illness, etc. Instead of withdrawing EPF funds, opting for a Personal Loan from Hero FinCorp can be a better solution:

  • Instant Loan Amount: Borrow personal loan up to Rs 5 Lakh based on your financial needs
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  • Flexible EMIs: Choose repayment terms of up to 36 months
  • No Collateral: Secure a Personal Loan without risking your assets

This ensures financial stability while preserving your EPF savings for future needs.

Read Also: EPF Advance vs. Personal Loan: Which is Better?

Conclusion

Although EPF's new rules 2024 have made withdrawals easier than before, you should avoid withdrawing funds before retirement. That is because early withdrawals reduce the EPF scheme benefit in terms of corpus and taxes. Instead, you can borrow a Personal Loan from Hero FinCorp to cover various expenses and repay the amount in easy EMIs.

Frequently Asked Questions (FAQs)

  • When will an EPF withdrawal become taxable?
    EPF withdrawal becomes taxable if the member withdraws funds before completing five years of continuous service.
  • Can EPF be withdrawn at any moment?
    EPF withdrawal is possible only under a few conditions, such as home purchase or construction, wedding, medical illness, etc.
  • Why can't I withdraw my EPF balance while working?
    The primary objective of EPF is to save for retirement and encourage long-term investment in the scheme. You can withdraw your EPF balance while working, but only for specific reasons.
  • Can I withdraw my full PF amount before I retire?
    You can withdraw 100% of the PF corpus before retirement if you stay unemployed for more than two months.
  • Is it possible to claim EPF without using the EPF portal?
    You can claim EPF offline by visiting your respective EPFO office and submitting a Composite Claim Form.

Disclaimer

The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.

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Written by  Katyaini Kotiyal

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Katyaini is a finance expert with a focus on the non-banking financial sector, bringing over 8 years of experience in NBFC. She specializes in simplifying complex financial concepts for readers, helping them navigate the NBFC landscape. Outside of work, she is passionate about travelling.

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