If you have an active Employees' Provident Fund (EPF) account, you and your employer contribute a specific amount to your EPF account. It is one of the financial tools that help accumulate a sufficient corpus for one's post-retirement years.
After retirement, the employee can withdraw the entire sum, or he/she can make premature withdrawals from the EPF account after meeting certain conditions before retirement. So, if you are wondering how to withdraw pension contributions in EPF, read this article.
What Is EPS (Employee Pension Scheme)?
Employee Pension Scheme (EPS) came into effect in 1995 under the Employees’ Provident Fund Organisation (EPFO) for the convenience of employees working under companies and organisations. Employees who come under this scheme are entitled to an employee pension scheme.
You and your employer willcontribute 12% each to the EPF account. Out of the employer's 12% contribution, 8.33% (up to a limit of Rs.15,000) will go to theEPS, while the remaining amount will go to the EPF. EPF is mandatory for all individuals with a monthly income below Rs.15,000.
When can you withdraw your pension contribution?
As per the EPF Act, any individual who retires after completing his/her service can get the pension amount by following proper procedure.However, one must meet the criteria or conditions listed below to withdraw the EPFO pension:
- You can take your pension home early if you have worked for ten years and reached 50 years. However, in that circ*mstance, you will only receive a reduced pension. The rate of pension decreases by 4% every year till you reach the age of 50.
- You can withdraw your pension contribution without any hitch when you have served for less than ten years but more than six months. However, you can withdraw it after being unemployed for approximately two months.
- In some circ*mstances, many individuals have reached the retirement age of 58 but have not served for ten years or more. Such instances generally happen if one has joined the organised sector after age 48. In such cases, employees are not eligible for a monthly pension. Although you will not receive payments monthly, you can still withdraw the entire amount from your EPS account in a single payment.
Documents required to withdraw from EPF
Here is the list of documents you will need to withdraw the pension contribution:
- Address proof
- Bank account statement
- 2 revenue stamps
- Identity proof
How much can a person withdraw from an EPF account?
There are certain limitations if you want to take money out of your EPF account before your retirement. You have the eligibility towithdraw contributions from EPF in certain situations:
| Condition When You Can Withdraw EPF | EPF Limit for Withdrawal |
| Wedding Ceremony | 50% of the total EPF contribution to date |
| Medical Emergency | It can be 6 times your present monthly salary or the entire corpus, whichever is less |
| Home Renovation | 12 times your current salary |
| Repayment of Home Loan | Not more than 90% of your EPF contribution |
| Unemployment | In such a scenario- 25% of the EPF contribution after 2 months of unemployment, and 75% of the EPF contribution after 1 month of unemployment |
| Retirement | Total amount |
How to withdraw your pension contribution?
You can withdraw EPS through both online and offline modes.
EPS pension withdrawal online process:
It does not involve any complicated procedure. However, for the online process, it is mandatory to link your Aadhaar with your UAN.
- First, visit theUnified Member Sewa portal and log in with your password and UAN.
- Under the ‘Online Services’ option, select ‘Claim (Form-31, 19 10C & 10D)’.
- The member details, KYC and other service details will be displayed on the screen.
- Enter the bank account number and click ‘Verify’.
- Select the claim type as ‘Withdraw Pension Only.’
- Go to the menu ‘I want to apply for’ and click ‘Only Pension Withdrawal (Form 10C).’
- Enter the permanent address in Form 10C and tick the disclaimer section.
- Click on ‘Get Aadhaar OTP.’ An OTP will be sent to your Aadhar-linked mobile number.
- Enter the OTP, click ‘Validate OTP’, and then the ‘Submit Claim Form’.
An SMS notification will be sent to the registered mobile after successfully submitting Form 10C. The pension claim will be submitted with Form 10C, and the EPS pension amount gets transferred to the savings bank account.
EPS pension withdrawal offline process:
- Download the composite claim form (with or without Aadhaar) from theEPFO website.
- If you are applying through the composite claim form (with Aadhaar), you need to provide your bank details and link your Aadhaar number with your primary account number.
- If you are applying through a composite claim form without Aadhaar, there is a need to link it with an account number.
- Lastly, submit the form to the jurisdictional EPF Office post providing the details.
Conclusion
EPF is an excellent option to save money for the future. Additionally, you can save taxes on the interest you earn with this scheme.
