How to Close PF Account – A Complete Guide

After 12 years of climbing the corporate ladder, Paras made the bold decision to start his own company. Before he embarked on his new venture, he decided to organise his finances. One of the key steps was to withdraw his Provident Fund (PF) balance, which stood at ₹3,50,000.

Upon reviewing his finances, Paras realised that he had been contributing to his PF over the years at a consistent rate of ₹30,000 annually (based on his salary deductions). With 12 years of contributions and the interest accumulated at an average rate of 8% per annum.

Paras wanted to close the account since he had no plans of returning to a salaried job. After logging into the EPFO portal, he found himself overwhelmed by the forms and options. “Form 19? Form 10C? Which one do I even need?” he wondered. He discovered that withdrawing the full amount required linking his Aadhar card, verifying his bank details, and submitting an online claim. If everything went smoothly, his PF balance of ₹3,50,000 could be credited to his bank account in 3 to 5 weeks.

However, Paras soon realised that a simple mistake in the process could delay the withdrawal for up to 6 months, costing him both time and potentially lost business opportunities. Determined to avoid such setbacks, he proceeded carefully, making sure all the details were accurate before submission.

Key Points to Consider Before Closing Your PF Account Online

To guarantee a simple and easy process, you need to consider the following important factors before closing your Provident Fund (PF) account online:

Eligibility Criteria:

• Retirement: You can close your PF account upon reaching the retirement age of 58. 
• Unemployment: If you’ve been unemployed for more than two months, you are eligible to withdraw your PF balance.

• Permanent Relocation Abroad: Individuals relocating permanently outside India can also opt to close their PF account.

   

KYC Compliance:

• Aadhaar Linking: Ensure your Universal Account Number (UAN) is linked with your Aadhar number.
• Bank Account Details: Verify that your bank account is correctly linked to your UAN, and the details are accurate.

• PAN Card: Having your Permanent Account Number (PAN) updated in the PF records is crucial to avoid higher tax deductions.

   

Tax Implications: 

• Service Less Than 5 Years: If you have contributed to the PF for less than five years, the withdrawn amount may be taxable.

• Service of 5 Years or More: Withdrawals after five years of continuous service are generally exempt from tax.

   

Processing Time:

• Claim Settlement Period: Online PF withdrawal claims are typically processed within 15-20 days.

• Tracking: You can monitor the status of your claim through the EPFO portal using the reference number provided upon submission.

   

Common Pitfalls to Avoid:

• Incorrect Bank Details: You need to ensure your bank details are accurate to prevent delays or rejections.

• Incomplete KYC: Incomplete KYC information can lead to claim rejection. Verify that all your details are up-to-date before initiating the process.

  
  Read More – How To Withdraw PF Amount
   

Documents Required to Close PF Account

Note: For online claims, ensure your Universal Account Number (UAN) is activated and linked with your Aadhaar, bank account, and mobile number. This linkage facilitates a smooth and expedited claim process.

By preparing these documents in advance, you can ensure a smooth closure of your Provident Fund account.

PF Account Closing Charges

There are usually no direct fees or costs associated with closing your Employees’ Provident Fund (EPF) account from the Employees’ Provident Fund Organisation (EPFO). But it’s crucial to understand the conditions and any tax ramifications that could impact the amount of your withdrawal:

Tax Deducted at Source (TDS):

• Service Less Than 5 Years: If you withdraw your EPF balance before completing five years of continuous service, TDS may be applicable.
• Withdrawal Amount Less Than ₹50,000: No TDS is deducted.
• Withdrawal Amount ₹50,000 or More: 
• PAN Submitted: TDS is deducted at 10%. PAN Not Submitted: TDS is deducted at the maximum marginal rate of 34.608%.

• Form 15G/15H Submission: If you submit Form 15 G (for individuals before 60 years) or 15H (for senior citizens) declaring that your total income is below the taxable limit, TDS may not be deducted.

   

Exceptions to TDS Deduction:

• Continuous Servcie of 5 Years or More: WIthdrawals after five years of service are exempt  from TDS.

• Specific Circumstances: No TDS is deducted if the withdrawal is due to termination of service because of ill health, discontinuation of the employer’s business, or other reasons beyond the employee’s control.

   

Example: 

Suppose you have been employed for 4 years and decide to withdraw your EPF balance of ₹60,000.

• With PAN Submitted: TDS of 10% (₹6,000) will be deducted, and you will receive ₹54,000.
• Without PAN: TDS at 34.608% (approximately ₹20,765) will be deducted, and you will receive around ₹39,235.

• With Form 15G/15H: If your total income is below the taxable limit and you submit Form 15G/15H, no TDS will be deducted, and you will receive the full ₹60,000.

  
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The amount that is withdrawn may still be subject to taxation depending on your income slab for that fiscal year, even if TDS may not be deducted in some circumstances. Therefore, before making the withdrawal, it is best to thoroughly understand the tax implications by speaking with a tax expert or consulting the most recent EPFO rules.

What is TDS?

TDS (Tax Deducted at Source) is a tax collection mechanism in India where a certain percentage of tax is deducted from the income of individuals or entities at the source of income. The deducted amount is then deposited with the government. TDS is applicable to various types of income, including salary, interest, dividends, and rent.

Key Points about TDS:

Purpose: TDS aims to collect tax at the source and ensure a steady inflow of revenue to the government. It also helps in reducing tax evasion.

Applicability: TDS is applicable on various payments, such as:

• Salary payments
• Interest on savings accounts and fixed deposits
• Rent payments
• Professional fees

• Commission payments

   

TDS Rates: The rate of TDS varies depending on the nature of the income and the status of the taxpayer (individual, company, etc.). For example, TDS on salary is based on the individual's income tax slab, while TDS on interest from fixed deposits is typically 10% if the PAN is provided.

TDS Returns: The deductor (the person or entity making the payment) must file TDS returns periodically to report the amount deducted and deposited with the government.

TDS Certificates: After deducting TDS, the deductor issues a TDS certificate (Form 16 or Form 16A) to the taxpayer, indicating the amount deducted. This certificate can be used for claiming tax credits when filing income tax returns.

Claiming TDS: If the total income of the taxpayer is below the taxable limit, they can submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens) to avoid TDS deductions. The taxpayer can claim a refund of TDS deducted if they are eligible for a lower tax rate.

How to Close an PF Account Online (Is It Possible?)

Visit the Official EPFO Website

• Go to the official EPFO (Employees' Provident Fund Organisation) website.

   

Select Online Service (OTCP/OCS)/Member UAN

• Choose the “Online Service (OTCP/OCS)” or “Member UAN” option on the website.

   

Sign in with UAN and Password

• Enter your UAN (Universal Account Number) and password.

• Click on “Sign in” and fill out the captcha code to proceed.

   

Go to Online Services

• From the menu, select “Online Services” and then click on “Claim (Form-31, 19, 10D & 10C)”.

   

Fill Out the Claim Details

• Complete the required details and choose the “Verify” option.

   

Sign the Certificate of Undertaking

• Choose “Yes” to sign the “Certificate of Undertaking”.

   

Select the PF Withdrawal Option

• From the drop-down list, select “Only PF withdrawal (Form 19)”.

   

Provide Your Address and Read Disclaimer

• Enter your correct address and carefully read the disclaimer.

• Choose “Get Aadhaar OTP”.

   

Enter the OTP

• You will receive an OTP on your Aadhaar-linked mobile number. Enter the OTP to continue.

   

Submit the Application

• Once the OTP is entered, submit the application.

   

Get a Reference Number

• After successful submission, you will receive a reference number. Keep this ID for future reference.

   

Important Considerations:

• Processing Time: The EPFO typically processes online claims within 10 to 15 days.

• Tax Implications: Be aware of the tax implications of withdrawing your PF balance, especially if you have not completed five years of continuous service. In such cases, TDS may be deducted.

   

Additional Resources:

For more detailed instructions, visit the EPFO’s official page on Online Claim Submission.

By following these steps, you can easily close your PF account online.

Tip for Closing Your Provident Fund Account

Make Sure Your KYC Is Up-to-Date: Verify that the EPF portal has the most recent versions of your Aadhaar, bank account information, and other KYC data. This will make the withdrawal procedure go more smoothly and quickly, saving you time and trouble. 

How to Close PF Account Offline (Step-by-Step Guide)

You must send a physical claim form to the Employees' Provident Fund Organisation (EPFO) to close your Provident Fund (PF) account offline. Here is a detailed guide to help you through the process: 

Determine the Appropriate Claim Form: The form you need depends on your specific situation:

• Form 19: For final settlement of PF balance.
• Form 10C: For withdrawal benefit or scheme certificate from the Pension Fund.

• Form 20: For settlement of PF in case of death.

   

These forms are available on the EPFO website. 

Complete the Claim Form:

• Personal Details: Fill in your name, address, and other personal information.
• Bank Details: Provide your bank account number and IFSC code.

• Signature: Sign the form as per the specimen signature available with EPFO.

   

Attach Necessary Documents:

• Cancelled Cheque or Bank Passbook Copy: Attach a cancelled cheque or the first page of your bank passbook to verify your bank account details. 
• Identity Proof: Include a self-attested copy of your PAN card, Aadhaar card, or passport.

• Address Proof: Provide a self-attested copy of a utility bill, Aadhaar card, or passport.

   

Employer Attestation:

• For Employees: Submit the form to your current employer for attestation.

• For Former Employees: If your previous employer is not available, you can submit the form directly to the EPFO office with a self-declaration.

   

Submit the Claim Form:

• To EPFO Office: Submit the duly filled and signed form along with the necessary documents to the EPFO office where your account is maintained.

   

Processing Time:

• The EPFO typically processes offline claims within 20 days. You can track the status of your claim using the reference number provided upon submission.

   

How to Check the Status of Your Account Closure Request

You can use the following procedures, which are based on instructions from the Employees’ Provident Fund Organisation (EPFO), to find out the status of your request to close your Provident Fund (PF) account:

Visit the EPFO website: Go to the official EPFO website: epfindia.gov.in.

• Visit the ‘Servies’ Section:
• On th homepage, find the “Our Service” tab.

• Click on “For Employees”.

   

Access the Member UAN Portal: 

• Under the “Service” section, click on “UAN Member Portal”.

• You may also directly visit the UAN Member Portal: UAN Member Portal.

   

Log in to Your Account: 

• Enter your Universal Account Number (UAN) and password.

• Complete the CAPTCHA verification and click “Sign In”.

   

Go to the ‘Claims’ Section:

After logging in, go to the “Online Services” menu.

Click on “Track Cliam Status”.

Enter Claim Details:

You may be asked to enter your claim reference number or ither relevant details associated with your claim request.

View Claim Status:

• Once you submit the information, the system will display the current status of your account closure request.

• The status may indicate whether your request is under process, approved, or any other relevant update.

   

Important Notes: 

Processing Time: The status may take some time to reflect based on the processing time of the EPFO, which is typically between 10 to 15 days for online claims.

For Non-UAN Members: If you do not have a UAN or if you submitted your claim through the offline method, you may need to check with your EPFO office or employer for updates on your request.

Common Issues Faced During Account Closure & How to Resolve Them

Incorrect or Incomplete KYC Details

Issue: Discrepancies in personal details, such as name, date of birth, or bank account information, can delay the closure process.

Resolution: Make sure the EPFO database has the most recent version of your KYC information, including your Aadhaar number, PAN, and bank account details. By using the EPFO Member Portal, you can update and confirm these details. 

Unlinked or Incorrect Bank Account

Issue: If your bank account is not linked to your UAN or the details are incorrect, the settlement amount cannot be credited.

Resolution: Link your bank account to your UAN and ensure the details are correct. This can be done through the EPFO Member Portal under the 'KYC' section.

Pending Employer Verification

Issue: If your previous employer has not attested your claim form, the closure request may be delayed.

Resolution: To finish the required attestation, get in touch with your employer. You can file a self-declaration to EPFO if the employer is unresponsive, but further verification could be necessary. 

Incomplete or Incorrect Claim Form

Issue: Submitting a claim form with missing or incorrect information can lead to rejection.

Resolution: Carefully fill out the claim form, ensuring all details are accurate. Attach the necessary documents, such as a cancelled cheque or bank passbook copy, and submit them to the EPFO office.

Unresolved Grievances

Issue: Unresolved issues from previous employers or discrepancies in contribution records can hinder the closure process.

Resolution: Raise a grievance through the EPFO Grievance Management System (EPFiGMS) to address and resolve such issues. Ensure all previous employers have updated your service records accurately.

Pending Transfer of Previous PF Balances

Issue: If you have not transferred your previous PF balances to your current account, the closure request may be incomplete.

Resolution: Initiate a transfer claim for your previous PF balances to your current account before proceeding with the closure. This can be done through the EPFO Member Portal.

Tax Deducted at Source (TDS) Issues

Issue: If your service period is less than five years, TDS may be applicable, leading to a reduced settlement amount.

Resolution: Ensure your PAN is linked to your UAN to avoid higher TDS rates. If your service period is less than five years, TDS is applicable, but you can claim a refund when filing your income tax return.

Inoperative or Dormant Accounts

Issue: Accounts with no transactions for 36 months become inoperative, complicating the closure process.

Resolution: Reactivate your account by initiating a transfer or withdrawal claim. Ensure all KYC details are updated to facilitate the process.

Incorrect UAN Details

Issue: Discrepancies in your UAN details can cause issues during the closure process.

Resolution: Contact your employer or the EPFO office to correct any discrepancies in your UAN details.

Conclusion

It's crucial to follow EPFO regulations and pay close attention to details while closing your Provident Fund (PF) account. It's critical to maintain your KYC information current and be aware of any tax ramifications, such as TDS on withdrawals, due to retirement, employment changes, or migration.

You may guarantee a seamless closure process by adhering to the guidelines, whether they are online or offline. Go to epfindia.gov.in, the official EPFO website, for further information and resources. You can successfully terminate your PF account and safeguard your financial future if you plan beforehand.

Frequently Asked Question

Q. How can I close my PF account completely?

You must take out your PF balance. To submit your request, download the Composite Claim form from the official website and follow the instructions. For this procedure, you can also go to the EPFO office and turn in a properly completed Composite Claim form.

Q. How much time will it take for the processing of EPF withdrawal?

Your EPF withdrawal may take 15 to 20 days to process, depending on how long it takes to submit the withdrawal request and gain employer clearance.

Q. What are the conditions for withdrawal of PF?

Only after being unemployed for a minimum of one month can an employee take 75% of their PF. He is unable to leave, nevertheless, while he is working.