Navigating the intricate world of Provident Funds can often feel like a journey through a labyrinth, filled with twists, turns, and the occasional stumbling block. In this exclusive interview, we dive deep with our in-house Provident Fund expert Mr. Mohd. Saif uncovering the most common challenges individuals face, and demystifying claim rejections, which is going to help you manage your Provident Fund efficiently. We have tried to get the best insights from the interview so make use of it.
Scenarios for partial or full PF withdrawals
Full withdrawal: Employees can withdraw the entire accumulated amount (employee and employer contributions along with interest) after reaching the retirement age. They can also claim the EPS amount (Employees’ Pension Scheme amount) at the same time.
Partial Withdrawals
- Unemployment: In case of unemployment for over one month, an employee can withdraw up to 75% of the total PF corpus. The remaining 25% can also be withdrawn if unemployment stretches beyond two months.
- Medical, education, marriage, and repaying home loans are other reasons for which PF can be withdrawn.
Common issues/rejections people face while filing a claim.
- Pension Withdrawl: According to the regulations set by the Employees Provident Fund Organization (EPFO), pension contributions are deducted only if an employee’s salary falls below Rs. 15,000. However, once an employee begins to receive a pension, the deduction continues regardless of his salary. This rule is often overlooked by employers when an employee joins a new company with a higher salary package, leading to the non-deduction of the National Pension Scheme (NPS) contributions. This oversight can create complications at the time of filing for Provident Fund withdrawals.
- Wrong exit date or overlapping exit dates: Sometimes the exit date of the previous employer and the joining date of the next employer overlap. So when you file a claim for PFwithdrawl it will get rejected citing overalap of service.
- Moonlighting:When an individual is working for two companies simultaneously and receives Provident Fund contributions from both, his claim will be denied due to overlapping service periods. This overlap complicates the process of withdrawing funds, making it more challenging for the individual to access their savings.
- Withholding PF: If your previous employer retains the last 1-2 months of your PF contributions, it can lead to issues with PF transfers. This happens because the exit date listed on the EPFO portal and the date the last contribution was made do not align. As a result, your claim may be denied due to the discrepancy in contributions.
Common documentation errors people make
- Bank account details mismatch with EPF: This includes your account number, IFSC code, bank name, and branch details. If your bank has merged with another bank or any of your details have changed, make sure to update your EPFO records with the new information. This will help ensure your claim is processed smoothly and without delays.
- Passbook/cheque cancelled: : While filing a claim you need to submit your passbook and cancelled cheque for bank details. Make sure that your passbook is stamped by the bank and your name and other details should be clearly visible in the cancelled cheque.
- Details mismatch in UAN and Adhaar: Make sure every detail in your EPF account and Adhaar match, be it DOB, your name, father’s name etc. word by word.
- Joint bank account: EPF claim can be rejected if you have given a joint bank account which is held with a person who is not a spouse. The EPFO will credit the claim money either in an individual bank account or a joint bank account held with the spouse.
We hope these insights on Provident Fund intricacies have cleared up some confusion and equipped you with the knowledge to handle your PF more efficiently. Don’t miss out on more insightful updates and tips—follow us on our social media channels (Instagram, YouTube, Linkedin, Facebook ) to stay informed and empowered about managing your finances effectively. Join our Whatsapp community and be part of the conversation.
If you have any PF-related query feel free to Whatsapp us on 81049 39319.For any help regarding personal finance head on to our website Finright.