The information about the amount deposited every month in the Employees' Provident Fund (EPF) account is shown in the passbook. But when an employee goes to withdraw money, sometimes he gets less amount than expected, why does this happen? We all think this, however, there are many reasons for this. In this news, we will explain in detail the reasons why there is a difference between the amount shown in EPF and the amount withdrawn and how to avoid it.

Employees Provident Fund Organization

EPFO Employees' Provident Fund Organization (EPFO) is considered an important savings scheme. This scheme works to provide financial security to the employees. This security from money is especially best for after retirement. Both the employee and the employer contribute to this scheme, due to which a strong fund is created in the future. However, the fund of its passbook and the fund for withdrawal are often different.

Money is deducted

Whenever we check our balance in the EPF passbook, then the money always appears to be more. But when we go to withdraw it, the amount changes to something else. Many times we get less funds at the time of withdrawal. There are some reasons for getting some amount in the passbook and less on withdrawal.

How is the balance different in the passbook?

The reason for getting less amount on withdrawal even after having more money in the EPF passbook is especially related to the tax (TDS) rules. Although it is easy to withdraw money from EPF, withdrawing before 5 years can lead to a tax shock. Suppose you have not completed 5 years of service and withdraw money, then the government can levy TDS i.e. Tax Deducted at Source. This TDS is 10% if you have a PAN card, but if you do not have a PAN card, it can reach up to 34.608%. Also, no TDS is levied on withdrawals of less than Rs 50,000. Apart from this, non-transfer of some amount or deduction of the pension fund can also be the reason. Therefore, it is important to understand the rules at the time of withdrawal.

Understand the conditions before withdrawal.

The rules and conditions regarding withdrawal related to EPF are very clear. If you are in a job, then the amount of PF can neither be withdrawn completely nor partially. But in case of unemployment, you can first withdraw 75% of the amount and if you remain unemployed for more than two months, then the remaining 25% can also be withdrawn. But even in this, the money in withdrawal gets reduced when tax, etc. is added.

Tax in EPF withdrawal

10% TDS is deducted on withdrawing money before 5 years. Now let's understand the calculation. Suppose out of 1 lakh, you will get only 90,000 rupees. The remaining 10 thousand are deducted as your tax. Also, get the passbook updated before withdrawal, it is important to fill Form 19, 10C, and other necessary documents correctly.

Why does EPF balance appear less?

If you see less amount deposited in your EPF account, do not panic. Sometimes due to technical reasons, the balance is not updated and the amount appears less. In such a situation, you can use the Umang app, missed call service, or SMS to check your EPF balance. (Note: The news is based on general information only.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.