Eligibility to Withdraw Pension Contribution in EPF: Rules, Age Limits & Conditions

EPF or Employee Provident Fund is a compulsory retirement savings scheme mandated by the Government of India for all employees. Established under the Miscellaneous Provisions Act of 1952, the primary objective was to provide a lump sum payment to employees upon retirement to meet their capital needs. 

Read on to learn all about the set criteria and eligibility to withdraw pension contribution in EPF.

What is EPF? 

The EPF or Employee Provident Fund is a retirement savings scheme that is available for all salaried individuals in India. This scheme falls under the administration of EPFO (Employee Provident Fund Organisation), a statutory body working under the direction of the Ministry of Labour and Employment of the Government of India.

Under this scheme, a fixed amount is deposited into an employee’s EPF account every month. Both the employee and the employer contribute a percentage of the employee’s salary toward this fund.

How is the EPF Calculated?

Here is an overview of the calculation of EPF:

• DA (Dearness Allowance) or Basic Salary

EPF calculation is based on a person's basic salary and Dearness Allowance (DA). If the basic pay of the individual is less than ₹6500 then the PF calculation is according to the gross salary. However, if the basic pay is more than ₹6500, the PF calculation is based on the basic pay.

• Contribution of Employee

12% of Basic Salary + DA is deducted from the employee’s salary and deposited into the EPF account.

• Contribution of Employer

The employer also contributes 12% of the employee’s Basic Salary + DA to the EPF. However, out of this 12%, a portion goes toward the Employees’ Pension Scheme (EPS), while the rest is deposited in the EPF account.

Eligibility Criteria to Withdraw Pension Contribution in EPF

There are some set criteria and rules to withdraw pension contributions in EPF. Here is a list of such criteria for eligibility to withdraw pension contribution in EPF:

• Meeting the Minimum Working Period of 10 Years

If a person has worked for at least 10 years before attaining the age of 50, they can opt for an early pension. However, the amount of pension in such an instance, is reduced to 4% every year until one reaches the age of 58. 

• Special Circumstances

There are circumstances where a person might have reached the age of 58 but did not serve for a minimum period of 10 years. In such instances, a person will not be able to withdraw their monthly pension. However, they can still withdraw the whole amount from the EPS account in the form of a single payment.

• Not Meeting the Minimum Working Period of 10 Years

When a person has worked for more than a period of 6 months but less than 10 years, they are eligible to withdraw their pension contribution after facing unemployment for a period of 2 months.

Required Documents to Withdraw EPF Contribution

The following documents need to be submitted to the regional office of EPFO (Employee Provident Fund Organisation) for withdrawing the pension amount:

• Copy of proof of address
• Copy of identity proof
• Duly filled out Form 10C (for people who have not completed 10 years of service)
• Two revenue stamps
• A duly filled out form 10D (For people who have attained 50/58 years of age)
• Copy of latest bank account statement

Ways to Withdraw EPF Funds 

Now that we have covered the criteria for eligibility to withdraw pension contribution in EPF and the documents required for it, let us consider the three primary ways of withdrawing EPF contributions. Here is a brief overview of each of the ways how a person can withdraw their Employee Provident Funds:

1. Online Submission of Application

If you want to understand the eligibility to withdraw pension contribution in EPF online form process, the EPFO has introduced their online withdrawal facility. This has made the whole process hassle-free and convenient for people who want to withdraw the amount. However, there are a few prerequisites that need to be met before being able to withdraw the contributions:

• The employee must activate their Universal Account Number (UAN) before initiating the withdrawal.
• The UAN should be KYC-linked to the applicant’s PAN, bank details or Aadhar Card.
• The UAN must be linked to KYC details, including PAN, bank account details and Aadhaar Card.

1. Withdrawal of EPF Through App

Employees who prefer the online option of withdrawal can also make use of the UMANG App (Unified Mobile App for New Governance), allowing for convenient withdrawals from their mobile phones.

1. Visiting the Nearest EPFO Office

An employee is eligible to withdraw funds by submitting a Composite Claim form (Aadhaar or Non-Aadhaar) by visiting the nearest EPFO office and submitting it. When opting for this option, it is essential to submit documents such as details of bank account, identity proof and a cancelled cheque.

Final Words

The Employee Provident Fund serves as an essential financial means for people post-retirement. By meeting the set criteria of eligibility to withdraw pension contribution in EPF, one can be sure to save effectively for their future.

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1. Can I withdraw EPF funds without providing PAN?

Yes, you are eligible to withdraw funds without submitting the PAN but this will result in a higher Tax Deduction at Source (TDS). You will be subject to a 30% deduction from the claim amount if you do not submit the PAN. Hence, an employee should provide a PAN when withdrawing EPF funds.

1. What are the requirements for withdrawing EPF for house loan repayment?

To withdraw funds from the Employees Provident Fund (EPF) for house loan repayments, a member must have worked for at least three consecutive years before applying for the withdrawal. Additionally, the maximum amount that can be withdrawn is up to 90% of the total EPF funds. 

1. Can a person withdraw 100% of their EPF amount?

Individuals cannot partially or fully withdraw their EPF funds while they are still employed. However, if they have been unemployed for at least one month, they can withdraw 75% of their EPF funds. If they remain unemployed for two months or more, they are eligible to withdraw the entire balance.

1. What happens if I do not withdraw my EPF funds post-resignation?

If you decide against withdrawing your funds post-resigning, they will continue to stay in your EPF account and earn interest. However, you have the option to either withdraw the funds or transfer them to your new employer.

1. How to withdraw pension contributions in EPF after leaving the job?

The best method of withdrawing EPF funds after leaving a job is by submitting a claim form online on the official portal of EPFO. This is a hassle-free option to withdraw the funds without visiting their branch or office.