Link your UAN to Aadhaar to get online PF claim in 5 days
For several employees, withdrawing one’s own money from the EPFO had been a tough task. The claim settlement process which earlier took several months, if not years, even required the employee to get the attestation done from the employer and withdraw through online PF claim.
Not anymore, as the EPFO had been taking steps to reduce the time taken to settle PF claims. Earlier the EPFO had introduced the ‘Composite claim form (Aadhaar)’, and the need for employer’s attestation was done away with.
Of late, the EPFO has introduced several new measures to bring down the claims settlement period and has now enabled the system to aim for the settlement of claims within 5 days.
To get the claim early, one needs to meet certain conditions as set by the EPFO. They are:
” It’s possible only if one applies for the claim online here .
” The employee needs to have the UAN.
” The KYC (Aadhaar and bank details) against their UAN should have been seeded
” The present employer should have approved/verified the e-KYC.
Once, logged in, click on ‘Manage’ and then ‘KYC’ to input the Aadhaar and bank details in the boxes provided. Once approved by your employer, the online claim facility (after at least two months of leaving the job) can be used to receive the PF funds into one’s bank account.
To authenticate the claim process, a one-time password (OTP) is sent to the registered mobile number with Aadhaar database. Once this OTP is entered, submit the ‘Composite claim form (Aadhaar)’ and the withdrawal process is initiated.
Composite claim form (Aadhaar)
The new Aadhaar linked ‘composite claim form’ can be used for availing benefits as under EPF Form 19, Form 10C and PF part withdrawals Form 31. One, therefore, needs to fill only one form and submit claims for PF final settlement, the partial claim for meeting housing, marriage, education or medical needs.
Using the has two major advantages – One, a claim can be submitted even without the employer’s attestation and secondly, one need not attach or send any documentary evidence to EPFO while claiming partial withdrawals for meeting housing, marriage, education or medical needs.
Viewing PF passbook
To view provident fund passbook, one may access it here . (https://passbook.epfindia.gov.in/MemberPassBook/Login.jsp) with one’s UAN and password.
The employees, who are under the exempted establishment i.e. where the provident fund is managed by a trust, have to contact their employer for the passbook. Generally, such exempted firms provide such details on their Intranet portal along with other employee services. But, before you submit your claim to withdraw PF online, keep an eye on the taxability of the money.
Tax on early withdrawals
If one has completed at least five years of continuous service the EPF withdrawal is not taxable. If one has switched jobs in less than five years but transferred the EPF to the new employer, it will be counted as continuous service. Someone, for instance, works for 1.5 years and then joins another organisation. and transfers their balance in provident fund to the new employer where he continues to work for 3.5 years. Taken together, it will be five continuous years of service for the employee. Therefore, it’s better to transfer your existing PF to your new employer.
There is tax implications if Withdrawing the PF balance Without completing five continuous years of service . The total employer’s contribution amount along with the interest earned will get taxable in the year of withdrawal. Also, the amount of deduction claimed under Section 80C on one’s own contribution will be added to one’s income in the year of withdrawal. In addition, the interest earned on one’s own contribution will also be subject to tax.
The government had introduced Tax Deducted at Source (TDS) on PF withdrawals in order to discourage premature withdrawals and promote long-term savings. No tax is deducted if the employee withdraws PF after five years. Also, TDS shall not be applicable in the case of PF transfer from one account to another. From June 1, 2016, for TDS, the threshold limit of PF withdrawal has been raised from Rs 30,000 to Rs 50,000. TDS will be applicable at the rate of 10 per cent provided PAN card is submitted.
Currently (2016-17), the EPF interest rate stands at 8.65 percent. As far as returns concern from a debt instrument, EPF certainly stands tall. The money is sovereign-backed and the interest earned is tax-free. In fact, it enjoys the Exempt, Exempt, Exempt (EEE) status as contributions are deductible from income. There is hardly any debt product that gives such high return with safety and assurance.
When you switch jobs it’s better to transfer your PF account and avoid the temptation to withdraw the amount.