PF Withdrawal Services
in India

Provident Fund Withdrawal

Provident Fund (PF) is a crucial financial instrument that plays a pivotal role in ensuring financial security for employees. It is a savings scheme that encourages systematic savings by both employers and employees, creating a corpus that can be utilized during retirement or in times of financial emergencies. In this article, we will delve into the various aspects of Provident Fund and its significance in financial planning.

Definition of Provident Fund:

A Provident Fund is a savings scheme where employees and employers make regular contributions, with the aim of building a fund for the employee’s future financial needs.

Types of Provident Fund:

There are primarily two types of Provident Funds: Employee Provident Fund (EPF) and Public Provident Fund (PPF). EPF is a mandatory contribution for salaried individuals, with both the employee and employer contributing a certain percentage of the employee’s salary towards the fund. On the other hand, PPF is a voluntary savings scheme open to all individuals, including self-employed professionals.

Significance of Provident Fund:

  1. Retirement Planning: One of the primary purposes of a Provident Fund is to provide financial security during retirement. The contributions made throughout an individual’s working life accumulate, creating a substantial corpus that can be withdrawn upon retirement. This ensures a steady income stream during the post-retirement phase, reducing dependence on others and maintaining a comfortable lifestyle.
  2. Forced Savings: Provident Fund serves as a mechanism for forced savings. The automatic deduction from the employee’s salary and the employer’s contribution ensures a disciplined approach towards saving. This disciplined saving habit not only secures the financial future of the employee but also instills financial discipline.
  3. Tax Benefits: Both the contributions made by the employee and the employer towards the Provident Fund are eligible for tax benefits under Section 80C of the Income Tax Act. This makes PF an attractive avenue for tax-efficient long-term savings. The interest earned on the PF contributions is also tax-free, providing an additional advantage.
  4. Financial Security in Emergencies: Provident Fund offers a safety net during unforeseen financial emergencies. In certain situations, employees are allowed to withdraw from their Provident Fund, providing a financial cushion in times of need. This feature makes PF a versatile instrument that caters to both long-term and short-term financial goals.
  5. Employer Contribution: Employers play a significant role in contributing to the Provident Fund, thereby aiding their employees in building a robust financial foundation. The employer’s contribution not only boosts the overall corpus but also reflects the employer’s commitment to the well-being of their workforce.

Process of PF Withdrawal:

Withdrawing money from a Provident Fund (PF) is a significant financial decision that should be made with careful consideration. Provident Funds, such as the Employee Provident Fund (EPF) in the case of salaried individuals, are designed to provide financial security, primarily during retirement. However, there are circumstances under which an individual may need to withdraw from their PF account. Below, we discuss the process of PF withdrawal and some implications associated with it.

  1. Eligibility: Before initiating a PF withdrawal, it’s essential to understand the eligibility criteria. Generally, individuals are allowed to withdraw from their PF account under circumstances such as retirement, resignation, or unemployment for a continuous period of two months.
  2. Form Submission: The withdrawal process begins with the submission of the appropriate form. The specific form required for withdrawal depends on the reason for withdrawal. For example, Form 19 is used for final settlement after retirement or resignation, while Form 31 is used for partial withdrawals in case of emergencies.
  3. Verification: The employer plays a crucial role in the verification process. The submitted withdrawal form needs to be verified and approved by the employer before it is forwarded to the Provident Fund Organization (EPFO).
  4. Submission to EPFO: Once the employer’s verification is complete, the withdrawal form is submitted to the EPFO for processing. This can be done physically or through the online portal, depending on the EPFO’s procedures.
  5. Processing Time: The processing time for PF withdrawal can vary. In some cases, it may take a few weeks to a couple of months for the funds to be disbursed. The process might be expedited if the withdrawal is due to certain emergencies.
  6. Bank Account Details: It is crucial to ensure that the bank account details provided for the withdrawal are accurate. The PF amount is typically transferred electronically to the provided bank account.

Tax Implication of PF Withdrawl: While the contribution to the PF is eligible for tax benefits, the withdrawal amount may or may not be taxable. If the withdrawal is made before completing five years of continuous service, and the amount withdrawn is more than Rs. 50,000, it is subject to TDS (Tax Deducted at Source). However, if the withdrawal is made after completing five years of service, it becomes tax-free.



In conclusion, Provident Fund is a cornerstone of financial planning, offering a structured approach to savings and ensuring financial security during retirement. Its dual benefit of forced savings and tax advantages makes it a preferred choice for employees looking to build a secure financial future.

While the Provident Fund provides a valuable financial cushion, the decision to withdraw should be made after careful consideration of the implications. It is advisable to consult with a financial advisor to understand the long-term impact on one’s financial well-being and explore alternative sources of funds for short-term needs.

If you are facing any problem in withdrawal of your Provident Fund, you can contact us. Our team will help you in smooth withdrawal of your PF.

Scroll to Top