A long-term investment plan called a Provident Fund (PF) gives workers retirement security. It is an obligatory payment made to a shared fund by the employer and employee. In India, there are a few situations where it is permissible to withdraw your Employees’ Provident Fund balance, including resignation, retirement, unemployment, and ending your employment.
Guidelines for Withdrawing PF Following Resignation
Payroll-primarily based employees can help in saving for his or her retirement by taking part within the worker Provident Fund (EPF) scheme. Participation inside the program is required of all personnel making much less than ₹ 15,000 a month. Employees and employers contribute to different retirement debts each month beneath the EPF plan. An employee’s PF balance can be withdrawn or transferred to their new corporation upon their resignation from their position.
The employees’ Provident Fund organization (EPFO) is liable for overseeing the guidelines about provident fund withdrawals following departure. In keeping with the rules, people who’ve been unemployed for two months or extra are eligible to withdraw the total amount from their PF account. This means that a worker can withdraw their entire PF account balance months following their final day of employment if they decide to stop.
Despite the fact that, before a worker can take out the entire stability of their PF account, some boundaries and necessities ought to be fulfilled. The worker’s completion of no less than five years of service in the modern-day firm is one of the maximum vital requirements. Most effectively the cash deposited to the PF account, hobby-free, can be withdrawn through the worker in the event that they have not yet finished five years of service.
PF Withdrawal Choices After the Resignation
Concerning their PF balance, an employee has three choices when they quit:
- Choice 1: Full PF withdrawal – Following their resignation, an employee may elect to take their full PF balance out of the system. Workers who have not worked for a company in more than five years might choose this option.
- Choice 2: Transfer of PF stability to a brand new company – If a brand new organization is registered with the EPFO and the worker has labored for the business enterprise for more than 5 years, they could choose this selection.
- Choice 3: Hold the PF account – Even after resigning, an employee has the option to maintain their PF account open. personnel who have worked for an employer for more than five years and no longer have a brand new enterprise registered with the EPFO may also pick out to apply this feature.
Guidelines for Withdrawing PF Following Resignation for Various Job Tenures
Depending on how long an individual has been employed, different rules apply when it comes to withdrawing PF after resignation.
Shorter than Five Years of Service
Upon leaving their job, employees who have worked for fewer than five years are entitled to take their whole pension fund amount. Together with the necessary paperwork, the employee must fill out Form 19 and send it to the EPFO.
Five to Ten Years of Service
Upon leaving their function, a worker who has worked for five or more years but much less than ten years is entitled to withdraw their complete retirement fund. If the worker makes a decision to take their PF balance out, they’ll be liable to pay taxes based on the policies in impact on the time of the withdrawal. As an opportunity, the worker may also determine to hold the popularity of their PF account or transfer their amount to a new organization.
Over a decade of service
Workers who have installed over a decade of service are entitled to take their complete pension fund balance upon leaving their task. If the worker comes to a decision to take their PF stability out, they may be vulnerable to pay taxes based totally on the regulations in impact at the time of the withdrawal. As an alternative, the employee may additionally determine to hold the fame in their PF account or switch their quantity to a brand new business enterprise. Following the EPS plan, the worker may also be certified for a monthly pension.
Exceptions to the Rule
There are exceptions to the rule where employees can withdraw their PF balance without completing five years of continuous service. These exceptions include the following:
- Illness: An employee may take withdrawals from their PF balance if they get seriously ill and need money for medical treatment.
- Hardship: The employee may withdraw their PF balance if they are experiencing financial difficulties and need the money to cover basic expenses.
- Disability: The worker is entitled to withdraw their PF balance if they are rendered permanently disabled and are unable to work.
Ways to Apply Online for PF Withdrawal?
Since the EPFO started offering online services, the process of applying for PF withdrawal following a resignation has become significantly easier. To request a PF withdrawal online, an employee can follow these steps:
- Step 1: Use your UAN and password to log in to the EPFO internet site.
- Step 2: Hit the “online services” page, then choose “declare (form-31, 19 & 10C)” from the drop-down menu.
- Step 3: Verify the statistics in your bank account and private records.
- Step 4: Provide the information about your former employment and the reason for your resignation.
- Step 5: Enter the quantity you want to withdraw and choose “form 19” from the listing of claim alternatives.
- Step 6: Finish the software technique and watch your bank account be credited with the budget.
Process for Resigning and Withdrawing PF
Following resignation, the following process must be followed to withdraw PF:
Fill out Form 19
Filling out Form 19 and sending it to your present employer is the first step in withdrawing your PF balance. You can get this form from the closest EPFO office or via the EPFO website. The employee must sign the document and deliver it to their current employer with a voided check or bank passbook.
Transfer of PF Account
An employee may move their prior PF account to their present one if they have several PF accounts and have changed employment. Form 13 must be submitted to the existing employer to do this.
Grant of Withdrawal Request
Upon submission of the form, the present employer will confirm the information and grant the request for withdrawal. After the date of submission, the procedure could take up to 20 days.
Payment of PF Withdrawal
Upon approval of the withdrawal request, the employee’s bank account will be credited with the total amount accumulated in their PF account. After the date of acceptance, it could take up to 30 days for the payment.
Tax Consequences of Withdrawing from PF After Resignation
People should be aware of the tax ramifications of retreating their PF after quitting. Let us have a look at the tax regulations governing PF withdrawals in line with an worker’s tenure:
- Regulations relating taxes on personnel with fewer than five years of provider: personnel with fewer than 5 years of service aren’t eligible for tax deductions on their PF withdrawals.
- Guidelines concerning taxes on greater than 5 years of service: If an employee has worked for more than five years, taxes may be deducted from their PF withdrawal. 10% TDS will apply to personnel who have not finished their five years of career. should they have supplied their PAN statistics at the time of withdrawal, employees who’ve finished extra than 5 years of service might be a problem to TDS at the price of 10%. alternatively, the worker can pay 34.608% in tax withholding in the event that they have not filed their PAN information.
- The tax deducted at source (TDS) does not constitute the worker’s complete tax obligation, it’s far crucial to take into account this. The income tax slab of the worker for the fiscal year might be used to decide their last tax liability. The worker may be eligible for a reimbursement when they report their income tax returns if the TDS deducted turned into extra than the actual tax liability.
Conclusion
Retreating your Provident Fund (PF) after resignation in India involves information about your tenure of service and the corresponding policies. Whether opting for full withdrawal, moving to a new organization, or maintaining the account, each preference includes its personal blessings and tax considerations. The net software procedure via the EPFO portal has streamlined access to funds, ensuring comfort for employees. It is vital to be aware of the tax implications based totally on your employment period to manage your budget effectively post-resignation.
FAQs
- Am I able to withdraw my PF after resignation?
Yes, you could withdraw your PF stability after resignation.
- What are the alternatives for PF withdrawal after resignation?
You can withdraw the whole stability, transfer it to a brand new organization, or hold the account.
- Is there a minimal provider requirement for PF withdrawal?
Yes, there’s a requirement of at least five years of provider for tax-unfastened withdrawals.
- How can I follow PF withdrawal on-line?
Log in to the EPFO portal, fill out the important paperwork, and put up your utility.
- What are the tax implications of PF withdrawal?
Taxes vary primarily based on your employment tenure; withdrawals before five years are situation to TDS.
