EPF Explained: PF Account, Withdrawal Process, Balance Check & Forms | Fi Money

No matter what kind of investor you are, you’ll agree that your financial plan should include the following three key objectives:

• To create wealth
• To retire comfortably
• To have a financial safety net for your family

The Employees’ Provident Fund (EPF) scheme, created and administered by the Employees’ Provident Funds Organisation (EPFO), can help you achieve all three goals in one go!

Finding it hard to believe? Well, so did I when I first heard of the EPF scheme. But now that I’ve taken a deep dive into how the Employees’ Provident Fund scheme works, I know better. So, today, I’ve decided to play Good Samaritan and tell you everything I’ve learned about this multifaceted scheme.

What is EPF?

Employee Provident Fund (EPF) is a retirement savings scheme designed to provide financial security to salaried employees after they retire. Think of it as a forced savings account where you and your employer contribute a portion of your monthly salary, which grows with interest over your working years.

What is Employee Provident Fund Organisation (EPFO)?

The Employee Provident Fund Organisation (EPFO) is the statutory body established by the Government of India that administers the EPF scheme. Operating under the Ministry of Labour and Employment, EPFO manages the EPF accounts of millions of employees nationwide, ensuring proper fund allocation, interest crediting, and claim processing.
This comprehensive guide covers everything you need about your EPF account—from contributions and interest rates to the withdrawal process, necessary forms, and much more. Whether you're a new employee or planning your retirement, this guide will help you navigate the EPF ecosystem effectively.

Understanding Your EPF Account

Your EPF account is identified by a Universal Account Number (UAN), which remains constant throughout your career regardless of job changes. This 12-digit number serves as your unique identifier with EPFO and helps link all your EPF accounts across different employers.
When you join a new organisation, you're assigned a member ID specific to that employer, but your UAN remains the same. This system ensures seamless fund transfer when you change jobs and provides a consolidated view of your EPF contributions.

Your EPF account has two components:

• The Employees’ Provident Fund, 1952 (EPF) 

This part allows you to create wealth over the long term. Throughout your working life, you will have to deposit a portion of your earnings in the EPF scheme. At the time of retirement or death, you or your nominee will receive the capital plus the accumulated interest.

• The Employees’ Pension Scheme, 1995 (EPS) 

EPS helps you retire comfortably since it takes care of your pension income. Under this scheme, employees who have attained 58 years of age will receive a monthly benefit. This essentially acts as a steady stream of income that can make retirement more convenient.

EPF Contributions: Employee & Employer Share

Employees working in eligible organisations must contribute a specific salary portfolio to their EPF accounts. Your employer matches your contribution and deposits the same sum in your EPF account.

Here is how these contributions work.

• Employee’s Contribution 

This part is straightforward. If you are an eligible employee, 12% of your salary will go directly into the monthly EPF scheme.

• Employer’s Contribution 

The employer’s contribution to the EPF scheme is divided into several parts, as shown below.

12% of your basic salary plus dearness allowance, but this is split:

8.33% goes to EPS (capped at Rs. 15,000 basic salary)
The remaining amount goes to EPF

However, practically speaking, private companies don’t pay out dearness allowance. Even retaining an allowance is rarely paid out as a part of the salary. So, if you are a private sector employee, it is highly likely that only your basic salary will be used to compute the contributions you and your employer have to make to your EPF account.

EPF Interest Rate & Balance

One significant advantage of EPF is its attractive interest rate, which is typically higher than what regular savings accounts provide. The EPFO declares the interest rate annually based on government recommendations.

The current EPF interest rate stands at 8.15% for 2023-24, making it one of India's most attractive fixed-income investment options.

Your EPF balance grows through:

1. Monthly contributions from you and your employer
2. Interest earned on the accumulated balance
3. Any transfers from previous employment

You can check your EPF balance through various methods:

1. EPFO member portal (unified-portal-emp.epfindia.gov.in)
2. UMANG app
3. SMS service
4. Missed call service (011-22901406)

Regularly monitoring your EPF balance helps ensure all contributions are appropriately credited and allows better retirement planning.

Understanding How EPF Contributions Work 

To better understand how EPF contributions work, let me provide some examples with real numbers for more clarity. Recall from the table above how the employer’s contribution to the EPS account is 8.33%, with the salary limited to ₹ 15,000?

So, we’ll take up two scenarios, as follows:

• Basic salary below ₹ 15,000
• Basic salary above ₹ 15,000

Scenario 1: Basic salary is below ₹ 15,000 

Let’s assume that your basic salary comes up to ₹ 10,000. In this case, here is how the breakup of the employee and employer contributions will work.

Since your basic salary is less than ₹ 15,000, you can use the entire amount to compute the employer’s contribution to your EPS, aka pension account. But what if your basic salary is more than this limit? That’s what the next scenario is all about.

Scenario 2: Basic salary is above ₹ 15,000 

Here, let’s say your basic salary is ₹ 20,000. So, given this number, check out how much you and your employer will contribute to your EPF and pension account.

As you can see, the EPS contribution is limited to ₹ 1,250 because the salary limit for this purpose is capped at ₹ 15,000. This sums up how your contribution and your employer’s contribution are calculated.

EPF Eligibility 

Not all organisations are liable to register with the EPFO and open employee accounts. Neither are all employees. Check out the rules regarding eligibility for the EPF scheme.

• Any organisation with 20 or more employees must mandatorily register with the EPFO and offer EPF benefits to its employees.
• Employees with a salary up to ₹ 15,000 must be a part of the EPF scheme.

That said, employees earning more than ₹ 15,000 — known as non-eligible employees — can also be a part of the EPF program. To do this, both the employee and their employer should agree and then obtain permission from the Assistant PF commissioner.

How Does the EPF Scheme Benefit You? 

By contributing to your EPF account regularly, you can earn a threefold benefit. Your EPF account gives you the advantage of capital appreciation, pension benefits, and insurance coverage. Let me give you the details of how these benefits work.

Benefits from EPF (Employees’ Provident Fund) 

You will earn interest on the monthly amount you contribute to your EPF account. The interest rate may be revised by the government, at its discretion, on an annual basis. The current EPF interest rate for the financial year 2022-23 is 8.10% per annum.

The interest is computed on your EPF balance each month, but it is credited to your account annually at the end of each financial year. You can withdraw your contributions along with the interest thereon after you retire. ‍ 

Benefits from EPS (Employees’ Pension Scheme -EPS-95) 

The EPS scheme gives you pension benefits. You will be eligible for these benefits under EPS if you have completed 10 years of service. And once you have attained 58 years of age, you will start receiving a regular pension.

You get a lifelong pension from EPS, and in case of your demise, your nominee will receive the pension benefits. The monthly pension is calculated with this formula:

‍ Monthly Pension = (Pensionable Salary x Pensionable Service) ÷ 70 

The pensionable salary is the average salary you have drawn over the past 12 months. Pensionable service is the number of years over which you made contributions to your EPS account. This period is rounded off to the nearest year. That means that a period of less than 6 months will be rounded down, while a period of 6 or more months will be rounded up.

Here are two things to note in this regard:

• The maximum pensionable salary has been capped at ₹ 15,000
• The maximum pensionable service has been capped at 35 years

So, the maximum pension you can receive from EPS is limited to ₹ 7,500, which is calculated as follows.

Monthly pension: 

= (₹ 15,000 x 35) ÷ 70

= ₹ 7,500

Benefits from Employees’ Deposit Linked Insurance Scheme (EDLI) 

When you open an EPFO account, you are automatically enrolled on the EDLI scheme, too. You do not have to complete any minimum service period to qualify for the insurance coverage under this scheme.

If something untoward happens to you during your service, your nominee is eligible to claim 35 times your average monthly salary (over the last 12 months). Here, too, the salary is capped at ₹ 15,000. In addition to this claim, a bonus of ₹ 1.75 lakhs is payable to your nominee.

For instance, say, an EDLI member earns an average salary of ₹ 20,000 over the past 12 months. In case of this member’s demise, the nominee can claim the following amount as insurance benefits:

Claim amount: 

= ₹ 15,000 x 35

= ₹ 5,25,000

In addition, they will receive a bonus of ₹ 1,75,000, bringing the maximum total benefits payable under this scheme to ₹ 7,00,000.

What is the Universal Account Number (UAN) in EPF? 

The Universal Account Number (UAN) is a unique 12-digit number given to all Employees’ Provident Fund scheme members. It is unique to each employee, and if you have a UAN, it will remain even if you switch jobs. You can easily use your UAN to transfer your EPF account balance from one employer to another.

Your UAN is also useful if you want to withdraw funds from your account. To learn more about EPF balance withdrawal and the rules surrounding it, check out the section below.

EPF Withdrawal: Rules, Process & Forms

Under some circumstances, you can withdraw your entire EPF balance. And in other scenarios, partial withdrawals may be permitted. Let us take a closer look at each of these separately.

EPF 100% (Full) Withdrawal 

The entire EPF balance can be withdrawn in the following scenarios:

• The EPF member has attained 58 years of age
• The EPF member is unemployed for two months or more
• The EPF member has passed away, in which case the nominee can withdraw the corpus

Note: Effective December 6, 2018, EPF members can withdraw 75% of the EPF corpus if they are unemployed for one month and the remaining 25% if they remain unemployed for 60 days or more.

EPF Partial Withdrawal 

Apart from the above scenarios, the EPFO allows for partial withdrawal of funds in some special situations where you may need financial assistance. Check out these circumstances and the associated conditions below.

Scenario: Marriage or education (for yourself, your children or siblings) 

• You should have completed 7 years of service to be eligible for this withdrawal.
• You can withdraw up to 50% of your EPF balance.
• You can avail of this benefit up to 3 times only.

Scenario: Medical treatment (for yourself, your spouse, children or parents) 

• The maximum amount you can withdraw is 6 times your basic salary.
• This facility can be availed for treatment or surgery for cancer, heart illness, mental ailments, tuberculosis or leprosy.

Scenario: Repayment of home loan (in your or your spouse’s name, or jointly in both your names) 

• You should have completed 10 years of service to qualify for this withdrawal.
• The maximum amount you can withdraw is 36 times your basic salary.

Scenario: Home alterations or repairs 

• You should have completed 5 years of service (in case of withdrawals for alterations) or 10 years of service (in case of withdrawals for repairs).
• The maximum amount you can withdraw is 12 times your basic salary.

Scenario: Construction or purchase of a house 

• You should have completed 5 years of service to be eligible for this withdrawal.
• The maximum amount you can withdraw is 36 times your basic salary (or 24 times if you want to use the funds to buy land).

How to Withdraw EPF: Step-by-Step Process

Online Withdrawal (UAN Portal - Preferred Method)

Prerequisites:

1. Activated UAN
2. Aadhaar linked and verified with UAN
3. Bank account and KYC details updated in the UAN portal

Step 1: Log in to the UAN Member Portal (unified-portal-emp.epfindia.gov.in) using your UAN and password
Step 2: Verify that your KYC details (Aadhaar, PAN, bank account) are correctly updated and verified
Step 3: Navigate to "Online Services" and select "Claim (Form-31, 19, 10C)"
Step 4: Confirm your bank account details (must be KYC verified)
Step 5: Select the appropriate Claim Type:

1. Form 31 for PF Advance (partial withdrawal)
2. Form 19 for Final PF Settlement (full withdrawal)
3. Form 10C for Pension Withdrawal Benefit

Step 6: If selecting Form 31 (partial withdrawal), choose the reason for advance, enter the required amount, and upload a scanned copy of the cancelled cheque/passbook
Step 7: Submit the claim using Aadhaar-based OTP authentication
The claim is then processed electronically, and if approved, the amount is directly credited to your registered bank account, typically within 10-15 days.

Offline Withdrawal

While less common now, you can still withdraw EPF by submitting physical forms:

1. Download the appropriate Composite Claim Form (Aadhaar or Non-Aadhaar based)
2. Fill in all required details and attach the necessary documents
3. Submit the form to your employer's HR department or directly to the nearest EPFO office
4. Track your claim status using the EPFO portal

Documents Required for EPF Withdrawal

For Online Claims:

1. Scanned copy of cancelled cheque/bank passbook (showing account number and IFSC)
2. Properly seeded KYC (Aadhaar/PAN/Bank details) in the UAN portal
3. For specific claims like medical or housing, relevant supporting documents may be required to be uploaded

For Offline Claims:

1. Completed Composite Claim Form
2. Cancelled cheque or bank passbook copy
3. Copy of Aadhaar card (for Aadhaar-based forms)
4. PAN card (for withdrawals exceeding ₹50,000)
5. Reason-specific supporting documents:
6. Medical emergency: Doctor's certificate, hospital bills
7. Housing: Sale deed/agreement, loan sanction letter
8. Marriage: Wedding Invitation
9. Education: Admission letter, fee receipt

Important: Updated KYC in your UAN portal is crucial for the smooth processing of online withdrawals. Without proper KYC verification, your claim may get rejected or delayed.

Understanding EPF Forms

Various forms serve different purposes in the EPF ecosystem:

Form 31: Used for claiming PF advance (partial withdrawal) while in service. This is the form to use when you need funds for medical treatment, home purchase, marriage, education, etc.

Form 19: Application for final settlement of your PF account when leaving service (resignation, retirement, or termination). This form helps you withdraw your entire EPF balance.

Form 10C: Used for withdrawing your pension fund (EPS portion) OR obtaining a scheme certificate if your service is less than 10 years. A scheme certificate helps preserve your pension rights when changing jobs.

Form 11: This declaration form is filled out when joining a new company. It provides your EPF account details and helps facilitate the auto-transfer of funds from your previous employer.

Form 13: Application for transferring your PF balance from a previous employer to your current employer. With the UAN system, transfers are primarily automated, but this form is used in cases where manual intervention is needed.

Composite Claim Form: A consolidated form that replaces Forms 19, 10C, and 31 for physical submissions. It comes in two variants—Aadhaar-authenticated and non-Aadhaar.

Understanding Claim Status

After submitting your claim, you can track its status:

1. Login to the UAN member portal
2. Go to "Track Claim Status"
3. View the current status of your application

Common status updates include:

Received: Your claim has been submitted.
In Process: EPFO is reviewing your claim.
Claim Settled: The claim has been approved, and payment has been processed. 

Typically, the amount is credited to your bank account within 2-3 working days after this status appears.

Auto Claim Mode: For certain types of claims (like COVID advance, illness, education, or marriage), EPFO processes them under Rule 68J/68N for faster settlement if your KYC is complete. This means minimal human intervention and quicker processing times, often within 3 days.

EPF Transfer

When changing jobs, you have two options for your EPF account:

Transfer: Move your EPF balance to your new employer (recommended)
Withdrawal: Withdraw the entire amount (tax implications if service less than 5 years)

The transfer process has been simplified with the UAN system:

1. Provide your UAN to your new employer
2. Ensure your KYC is up-to-date
3. Your new employer will initiate the transfer process
4. Alternatively, you can initiate the transfer yourself through the UAN portal

Employees’ Provident Fund Tax Benefits 

You can earn a threefold benefit from your Employees’ Provident Fund account. This is what makes this scheme an Exempt-Exempt-Exempt (EEE) option. Let me take you through the tax benefits that you can avail of under the Income Tax Act, 1961.

Tax benefits on contributions 

The contributions that you make towards your EPF account are eligible for tax deduction under section 80C of the Income Tax Act, 1961. As for the employer’s contribution, it is tax-free as long as it is within the 12% limit.

But the extra amount of employer contribution will be added to your salary and taxed accordingly if your employer contributes more than 12% to your EPF account (if they do, hang on to them!).

Tax benefits on withdrawals 

When you withdraw the funds from your Employees’ Provident Fund account, you receive two parts — the investment amount and the interest amount. The investment amount is entirely tax-free if you make your withdrawals after 5 years of continuous service.

Continuous service involves working under the same employer, or under different employers, provided you transfer your EPF to the new employer.

‍ Tax benefits on interest 

The interest component was also originally entirely tax-free. However, Budget 2021 brought in new rules, effective from April 1, 2021. As per these new rules, the interest amount will be taxable in your hands if the employee’s contribution exceeds ₹ 2.5 lakhs during the financial year.

But if your EPF contributions are below ₹ 2.5 lakhs during the year, the interest credited is still tax-free.

Voluntary Provident Fund: Contributing more than 12% to your account 

If you don’t mind reducing your take-home salary and want to increase your contribution towards your savings, you can set aside more than 12% of your salary. This goes into your Voluntary Provident Fund (VPF). Here are some of the salient features of this scheme.

• Your employer has no obligation to contribute to your VPF account.
• The maximum contribution you can make to this account is up to 100% of your (Basic Salary + Dearness Allowance).
• The interest rate on this balance is the same as your EPF rate.
• If you open a VPF account, you cannot close it for a period of 5 years.
• Only salaried individuals can open a VPF account.

EPF Grievance Redressal

If you face issues with your EPF account, EPFO offers several grievance redressal mechanisms:
EPFiGMS: Online grievance management system accessible through the EPFO website
CPGRAMS: Centralised Public Grievance Redress and Monitoring System
Social media: EPFO maintains an active presence on Twitter and Facebook to address queries
Nidhi Aapke Nikat: Monthly open house at EPFO offices
Toll-free helpline: 1800-118-005

Summing up 

This sums up everything you need to know about the workings of the EPF scheme. As you can see, it is a comprehensive savings avenue launched by the Indian government. By keeping your EPF contribution intact, you can retire comfortably when you reach the age of 58 or so. And now that you know how the EPF works and what tax benefits it offers, you can make the most of your EPF contributions during your working years.

Frequently Asked Questions (FAQs) 

1. What does EPF mean? 

EPF is an acronym for Employees’ Provident Fund. It is a savings scheme run by the government of India, which allows you to invest a portion of your wages over the course of your working life. You also get pension benefits and a life insurance cover under the Employees’ Pension Scheme and the Employees’ Deposit Linked Insurance Scheme, respectively. Both these schemes are a part of the EPF scheme.

2. What is the difference between PF and EPF? 

PF is short for Provident Fund. It is often used to refer to the EPF scheme itself. So, if you hear the term PF or read about it, it is likely that the term refers to EPF itself.

On the other hand, if you are referring to PPF or the Public Provident Fund, that is a separate investment scheme backed by the Indian government. It is open to salaried, self-employed, unemployed and retired persons. The EPF scheme, on the other hand, is only for salaried individuals.

3. Who is eligible for EPF? 

Employees with a salary of ₹ 15,000 or lower are eligible for EPF. That said, if you earn more than ₹ 15,000 too, you can register with this scheme, provided you and your employer agree and obtain the Assistant PF Commissioner’s permission.

4. How can I change my EPF password? 

You can change your EPF password by logging into the EPFO Member e-SEWA official website. You will find a dedicated option to change your password on this platform. Simply enter your old password and your new password, confirm the new password, and you should be good to go.

5. What is the difference between EPF and EPS?

EPF (Employee Provident Fund) and EPS (Employee Pension Scheme) are different components of your PF account. EPF is your retirement savings, where both you and your employer contribute 12% of your basic salary. EPS uses 8.33% of the employer's contribution (capped at ₹15,000 salary) to provide pension benefits after retirement. EPF gives you a lump sum when you retire, while EPS offers a monthly pension if you have at least 10 years of service.

6. Can I withdraw 100% of my PF balance while still working?

You cannot withdraw 100% of your PF balance while still working. While employed, you can only make partial withdrawals (PF advance) for specific reasons like medical emergencies, housing, education, or marriage. These advances have particular eligibility conditions and withdrawal limits. Full settlement (100% withdrawal) is only possible after retirement, resignation, or termination of service.

7. How long does it take for the PF withdrawal amount to be credited?

For online claims with complete KYC, the PF withdrawal amount is typically credited within 10-15 days after submission. Under auto-claim mode for specific reasons (like COVID advance, education, marriage), processing may be faster—around 3-5 days. Offline claims generally take longer, approximately 20-30 days. Once your claim status shows "Claim Settled," funds are usually credited within 2-3 working days.

8. What if my KYC is not updated in the UAN portal?

Without updated KYC in your UAN portal, your online withdrawal claims will likely be rejected. You must update your KYC by providing Aadhaar, PAN, and bank details through your employer or the UAN portal. For immediate needs, you may need to submit a physical claim form with supporting documents to the EPFO office. Complete KYC is essential for smooth online transactions and auto-claim processing.

9. Is EPF mandatory for all employees?

EPF is not mandatory for all employees. It is compulsory for establishments with 20 or more employees and employees earning a basic monthly salary of up to ₹15,000. For those earning above ₹15,000, EPF enrollment is optional when joining a new company. Some establishments are exempt if they have their own PF trust. Small businesses with fewer than 20 employees can voluntarily register with EPFO.

10. What happens to my EPF account if I move abroad?

When moving abroad permanently, you can withdraw your entire EPF balance regardless of your service period. You must submit Form 19 (for EPF withdrawal) and Form 10C (for pension withdrawal) along with a copy of your visa, passport, and cancelled bank cheque. Online withdrawal is possible if your KYC is complete. Your account becomes inactive if not claimed within three years of moving abroad.

11. Can I have multiple UANs?

You should not have multiple UANs. Each employee should have only one UAN throughout their career. Multiple UANs create confusion, make tracking difficult, and may lead to missed interest. If you discover multiple UANs, you should merge them by submitting a UAN merger request through your current employer or directly to the EPFO office. This ensures all your PF contributions are consolidated under one UAN for better management.