The Employee Provident Fund Scheme (EPF) provides an employee with a much-needed option to save a part of his monthly salary for retirement. Twelve per cent of basic pay+dearness allowance of an employee is contributed to his/her PF account.
The employer also contributes a matching amount, of which 8.33 per cent goes towards the Employee Pension Scheme (EPS) and the remaining to PF account. The corpus accumulated in PF account is meant for utilisation by the employee after his/her retirement.
However, an employee can withdraw money from the Provident Fund account based on a list of reasons provided by the Employees’ Provident Fund Organisation (EPFO). Several PF subscribers want to know about how to withdraw from Provident Fund account for loan repayment.
One can withdraw up to 90 per cent of the PF corpus for repaying the loan. Section 68BB of The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 allows PF withdrawal for repayment of loans in special cases, including the loan for buying or constructing a house or flat. Section 68BB says:
No PF withdrawal will be allowed unless the member has completed 10 years’ membership of the fund; and the member’s own share of contributions, with interest, is one thousand rupees or more.
How to withdraw from PF/EPF account for loan repayment
One can withdraw from PF/EPF account for loan repayment in two ways – offline and online.
Those, who want to opt for offline mode, are required to submit a physical application. She/he needs to download a claim form from the EPFO website. Please note that there are also two types of claim forms – with Aadhaar and non-Aadhaar.
Those, who want to opt for online EPF withdrawal, need to do it through EPFO website. However, the individual needs to ensure that Universal Account Number (UAN) is active and the registered mobile number is also in working mode. The UAN needs to be linked with Aadhaar, PAN and bank details.
Once you have these things ready, you need to go to the UAN portal and login with your UAN and password. You need to click on the ‘Manage’ option and select KYC. You must verify your Aadhaar, PAN and Bank details.
Once the details are verified, you need to go to the ‘Online Services’ and select (Form-31, 19 and 10C). Once you select the option, a page with details such as – employee name, father name, date of birth, mobile number, Aadhaar number, PAN number, IFSC code, Bank branch name and address, service details will be provided. You need to enter the last four digits of the bank account number.
Once you do that, a message of ‘certificate of undertaking’ will appear and you need to click on ‘YES’ to I agree to the terms and conditions.
Subsequently, you need to click on ‘proceed’. Then you need to opt for the claim option.
After that, you need to select ‘PF Advance’ form and clarify why do you want to withdraw the amount in advance. Then you need to select the certificate and submit the application.
