INVC Financial Desk l
As more employees turn to their EPF savings to navigate financial stress, many are reporting a rude shock — the amount credited to their account is far less than the figure displayed in their EPF passbook. In 2025, this issue is growing due to a combination of tax deductions, system delays, and misunderstandings about the Employee Pension Scheme (EPS).
Here’s a comprehensive breakdown of why your EPF payout may be falling short — and how you can avoid common pitfalls.
1. Tax Trouble: TDS Can Eat into Your Corpus
A major reason behind lower-than-expected withdrawals is Tax Deducted at Source (TDS). If you withdraw your EPF before completing five continuous years of service, your withdrawal becomes taxable:
✅ 10% TDS is levied if you’ve provided your PAN
❌ 34.608% TDS is applied if PAN is not submitted
💡 Withdrawals below ₹50,000 are exempt from TDS
In some cases, employees unaware of this rule get a significantly reduced payout — especially those changing jobs frequently or exiting early.
2. EPS: The Hidden Deduction Many Forget
Another surprise comes from the Employee Pension Scheme (EPS). A portion of your employer’s contribution — up to ₹541 per month (as per current cap) — is diverted towards EPS. This amount doesn’t reflect in your EPF withdrawal but isn’t lost either. It’s tracked separately and is claimable via Form-10C after meeting eligibility.
3. Glitches in Passbook and Fund Transfers
Technical issues can lead to delayed passbook updates, making it appear like you have more funds than you actually do. Other times, your old PF accounts from previous jobs may not have been merged properly, resulting in an incomplete picture of your actual balance.
Employees are encouraged to:
Check balances via EPFO portal, Umang App, or missed call/SMS services
Submit Form-19 (for EPF) and Form-10C (for EPS) correctly
Regularly monitor passbook entries and transfer status of old PF accounts
4. Withdrawal Rules: Partial Exit and Unemployment Clauses
You cannot withdraw your EPF while still employed. However, if you’re unemployed:
After 1 month, you can withdraw 75% of the balance
After 2 months, the remaining 25% becomes eligible
Still, TDS may apply even in these cases.
Also read:
🔗 Centre’s big push for employment-linked skilling schemes
🔗 PF interest rate revision: What employees should know
5. Proactive Steps: How to Avoid a Withdrawal Shock
✅ Ensure your KYC is updated on the EPFO portal
✅ Track all PF account numbers and merge old accounts
✅ Use correct forms (Form-19 & 10C) and check their status post submission
✅ Keep copies/screenshots of claim acknowledgements
Also read:
🔗 Government expands pension coverage under EPS
🔗 Umang app: One-stop solution for EPFO services
Conclusion: Stay Informed to Protect Your Savings
Your EPF savings are a critical financial resource — but tapping into them without understanding the tax rules, form requirements, and passbook status can lead to a disappointing payout. As we move into FY 2025-26, employees are urged to be proactive and informed.
Also read:
🔗 Labour Ministry pushes for digital transformation in EPFO
