Common Reasons Why Your Online EPF Claim is Being Rejected

  • Author :
  • TATA AIG Team
  • Published on :
  • 14/03/2024

An Employee Provident Fund or EPF is a financial instrument that proves to be tax-saving and high-yielding for its investors. It demands the employee and employer to invest in order to safeguard the employee’s retired life.

Thus, when an employee’s online EPF claim is rejected, it does not make an ideal situation. Online EPF claim rejections are a common concern among employees seeking to withdraw their provident fund balances. These rejections often stem from discrepancies or non-compliance with the Employees' Provident Fund Organisation (EPFO) guidelines.

This blog precisely points out the online EPF claim rejection reasons, and there are many. If one is aware and educated about those, they can avoid rejection.

Employee Provident Fund (EPF) Meaning

The Employee Provident Fund (EPF) in India is a retirement savings scheme for employees in the organised sector, where both the employee and employer contribute a fixed percentage of the employee's salary, typically 12%, to the fund monthly​​​​.

Managed by the Employees' Provident Fund Organisation (EPFO), the scheme aims to build a substantial retirement corpus for employees.

The funds accumulate tax-free interest and can be withdrawn under specific conditions, such as unemployment, retirement or for specific expenses like education and medical emergencies​​​​.

When can Employees File an EPF Claim

If unemployed for at least a month, one can withdraw up to 75% of the funds, with the remainder accessible after two months of unemployment​​.

  • Full EPF withdrawal is permitted upon retirement, and partial withdrawals are allowed for reasons like medical emergencies, home acquisition or higher education​​.

  • The EPF withdrawal/claim process can be done online for convenience, requiring the employee's Universal Account Number (UAN) to be activated and linked with KYC details​​.

Tax implications apply if the EPF is withdrawn before five years of continuous service, with TDS applicable under certain conditions​​.

EPF: Online Claim Rejection Reasons

Incorrect Documentation

When one registers for an EPF account, they must submit a set of information to complete the registration process. This information, along with the documentation provided for the same, is saved in the EPFO (Employee Provident Fund Organisation) database.

Now, when they raise an online EPF claim, these documents and information need to match. If the EPF claim is rejected, the reason might be incorrect or mismatched information or documents.

For example, the contact number, name, residential address, joining date, etc., are some of the information on the documents that might be mismatched.

Incomplete KYC

One of the primary PF rejection reasons is incomplete or incorrect KYC. “Know Your Customer” is an essential tool that stands as proof of the investor’s or employee’s financial situation. One must fill in all the accurate information while submitting the KYC form and get it verified by the officials.

Filling up correct professional information and personal details and getting them verified by the officials will prove the employee to be a reliable investor. This negates the chances of their claim being rejected.

Since the financial and work details matter the most when it comes to financial investment, KYC holds great power over the decisions of EPFO. So, this is just an inexcusable error that can be rectified with resubmission.

Non-Compliance

Non-compliance is one of the most common PF rejection reasons nowadays. If the PF claim is rejected, the reason might be that the employee has violated withdrawal rules by submitting the claim without complying with the EPFO protocols.

There are a few rules and regulations when it comes to EPF withdrawal: employed for 6 months or more, an active account at the time of the claim, 5 years of continuous service, etc. These are the non-negotiable eligibility conditions. (We will talk about these later in more detail.)

Inaccurate Bank Details

Accurate bank details are an essential part of an applicant’s responsibility as an investor and an employee. Some critical details, like IFSC code, bank account number, signature, full name, etc., are essentials of any financial and organisational procedure.

Incorrect or inaccurate entry of these details will lead to further difficulties, and one of them is the rejection of the EPF claim. Employees can check the submission and verify if they have entered the correct details or not.

Lack Of Linking

The Aadhaar Card must be linked to the Universal Account Number (UAN), and the UAN needs to be linked to the bank account. The employee’s UAN is a unique number provided for their EPF account by the EPFO. This number is their identifier as an EPF account holder. EPFO has made it mandatory to get the Aadhaar linked with the UAN, too.

Thus, if these two linkings are not done, the claim might get rejected. Ensure to verify this if the claim has been rejected!

Form 10C Rejected

There are a few rules in order to withdraw a pension, like 6 months of employment. But if, for any reason, the employee cannot fulfil that and still wants to enjoy the benefits of their EPF account, they will have to fill out Form 10C.

If their 10C gets rejected, their EPF claim might also get rejected. There are multiple reasons behind form 10C getting rejected.

Technical Error

This is not the most likely incident, but if there is any kind of error with the server or other technical issue, the online EPF claim might get rejected.

A server glitch, shut-down, human error, or anything else can cause the server to falter and reject the request.

EPF or PF Claim Rejected? Here’s How To Apply Again!

Employees will have to understand the entire procedure and look into the reason for the rejection of their EPF claim. Once they find out the reason, they can reapply through the same procedure.

Understand Eligibility

Check the eligibility of the EPF claim. There are various criteria that one must fulfil. There are different types of PFs, so learn about the criteria beforehand and ensure their completion. The employee can then reapply and claim their EPF withdrawal online.

Right The Wrongs

Check the error that got the claim rejected and rectify it. It might have been incorrect spelling, inaccurate information, mismatched signatures or bank details, or lack of documentation. Verify it with the officials, rectify the errors, and submit the claim once again.

Seek Professional Assistance

If the claimant feels like they will need help from expertise in the field, they can ask for the necessary help. The employer, the finance team in the company, or the EPF officials, anyone can help claimants with their difficulties.

Raise A Claim On Time

Keep track of the time. The timeline is essential when it comes to financial instruments like EPF. The EPF claim needs to be raised at a specific time. Early or late submission of the claim might lead to rejection as well!

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Ending Note

The best thing one can do before beginning an EPF claim is to keep themselves aware of its eligibility criteria and required documents. All the reasons an online EPF claim gets rejected revolve around these two points.

Understanding a procedure will make the actual process more manageable, fun, and profitable because then one will have completed the procedure without any hassle and resubmission!

Next time, be aware and verify!

FAQS

Is it important to maintain continuity in employment for EPF claim withdrawal?

In order to fulfil the minimum necessary period of employment to withdraw the EPF claim, you will have to continue employment with the concerned employer. Otherwise, your claim might get rejected.

How long does it take to process an online EPF claim application?

Your online EPF claim application should be processed within 15 days if there are no complications in the procedure.

Do you need your employer’s approval before raising a claim?

Your employer’s approval is not required to raise an online EPF claim.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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