Is it possible to withdraw PF amount before 5 years of Service?

It is important to note that withdrawal of the EPF account by a salaried employee is not recommended(Technically not allowed). Many employees withdraw their EPF account at the time of leaving the organization. Legally right thing is to transfer the EPF account from old employer to new employer

After leaving your old job and being unemployed for 2 months you can withdraw EPF & EPS. EPFO handles EPF withdrawal within 20 days. It is planning to bring it down to few hours.

Exceptions.

·         A woman who quit their job for getting married, pregnancy or childbirth will not have to wait for two months to withdraw.

·         if you are quitting due to health reasons.

·         Who is going abroad for employment/settlement and don’t intend to return soon.

Provident fund withdrawal before five years of completion of service will attractTDS(tax deducted at source) effective from 1 Jun 2015.

TDS on EPF will be deducted if withdrawal is more than Rs 50,000. This is applicable from June 2016.Earlier this limit was Rs 30,000.

TDS will be deducted at 10 % provided PAN is submitted. Otherwise, TDS is deducted at the rate of 34.608 % if PAN is not submitted.If you withdraw offline you can submit form 15G/15H to avoid TDS.

·         You can withdraw online or offline

You can withdraw online using UAN member portal (if KYC is approved). Our article How to do Full or Partial EPF Withdrawal Online explains it in detail with images and video.To withdraw EPF offline through old employerIf you have UAN then you have to submit Composite PF Claim Forms (Aadhar based and Non-Aadhar based) which replaced forms No. 19, 10C, 31, 19 (UAN), 10C (UAN) and 31 (UAN)To withdraw EPF offline through old employer If you don’t have UAN You have to submit Form 19, and Form 10CTo withdraw EPF offline without going through old employer for un exempted organisations you can approach EPFO directly. Unexempted organisations are those where you are not contributing to EPF Private Trust.

·         You can Track EPF Withdrawal

·         You will get regular SMS updates

·         You’ll receive two different amounts. One is for your EPF withdrawal and one is for Pension contribution.

·         if you withdraw your PF balance before the expiry of five years of contribution, then it is taxable in the year in which you withdrew.Your employer’s contributions along with the accumulated interest amount will be taxed as “profits in lieu of salary” under the head Salary.However, relief under Section 89 will be available.Interest accumulated on your (employee) contributions will be taxed under the head “Income from other sources”.The tax deductions claimed on your contributions to EPF will be revoked or rolled back, and shall be liable to tax.

More details at EPF Withdrawal before 5 years,TDS,Form 15G,Tax and ITR

There is no minimum period for EPF withdrawal (for pension withdrawal benefit the minimum service length of 6 months is needed).

You may apply for final settlement of your EPF, which is subject to certain conditions  (I believe you fulfill), otherwise, after 36 months of non-contribution it will stop accruing interest.

If you wish, you may  get the withdrawal at later stage; you will loose some interest and will need to follow some additional procedure for settlement in Inoperative marked EPF accounts.

Also, you will have to submit details of PAN, Form-15G to avoid TDS (if amount of EPF withdrawal is above 30k) along with withdrawal form.