Last Updated on October 6, 2023 by BFSLTeam BFSLTeam
EPF (Employee Provident Fund) or PF (Provident Fund), as it is sometimes referred to, is a savings scheme offered to employees in the Public and Private Sectors of India. Both employers and employees contribute to this scheme so that employees have a savings scheme built up over a period of their working life. The goal of the scheme is to permit employees to collect capital that will help them during their retirement. The corpus that is created by the EPF scheme may be accessed by the employee or withdrawn by the employee according to regulations and certain rules. The scheme was set up by the EPFO (Employment Provident Fund Organisation) and is supervised by the Government of India. Let us find the PF/EPF Withdrawal Rules in this article.
Also Read: UAN Member Portal
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EPF or PF Withdrawal
The funds in an EPF or PF account are meant to be withdrawn when an employee retires from active employment. Nonetheless, particular Provident Fund withdrawal regulations and rules exist to permit people to use the collected PF sum for any emergency needs. The EPFO has made such regulations permissible for this specific purpose. Holders of an EPF account may make different kinds of withdrawals such as those mentioned below:
- PF partial withdrawal
- PF final settlement
- Pension withdrawal benefit
A person may withdraw a portion (a partial amount) from their EPF account before it reaches maturity (there are exceptions in case a person becomes unemployed) under particular circumstances. If you have a PF or EPF account, it is important for you to know these circumstances and the rules pertaining to them.
EPF or PF Withdrawal Rules – 2023
You can get information about the EPF or PF withdrawal rules on the EPFO portal, but here are some key rules to get you started:
- You can make withdrawals from an EPF or PF account provided an account has been activated for you, as a salaried employee.
- You are permitted to withdraw up to 75% of the PF or EPF funds if you are unemployed for a period of at least a month. The balance amount in your PF or EPF account may be withdrawn after a period of 2 months of unemployment.
- When you withdraw amounts from your EPF or PF, you are not able to submit Form 15G/Form 15H to avail of TDS.
- You may take a loan against the funds in your PF or EPF account if you have been in your employment for a certain period.
- In case you change your job or employment, you are not required to withdraw funds from your PF or EPF account and transfer them to the new employment provided your UAN (Universal Account Number) remains active.
- In case you have been unemployed for two months, you may withdraw the entire amount of funds in your PF or EPF account. You may also withdraw the entire amount in your EPF account if the joining date of a new job is 2 months later than the last working date of your old job.
With a PF member login, you may use your UAN to find out more details about withdrawal rules and options.
PF Withdrawal Rules – Common Use Cases
When you know some of the common reasons for the withdrawal of funds from your PF or EPF account, you may understand why certain rules apply. The EPFO has listed some cases and these are highlighted below:
- Withdrawal due to Unemployment
A PF or EPF account holder is able to withdraw up to 75% of the total collected amount if they have been unemployed for more than a month. Additionally, this provision allows the EPF account holder to withdraw the 25% remaining amount if unemployment stretches to 2 months and over.
- Withdrawal due to Education
EPF account holders are permitted to withdraw up to 50% of the entire employee’s contribution to pay for their own higher education or bear the expenses of education of their children who have completed class 10. However, this is permitted subject to a minimum of 7 years of contribution towards an EPF account.
- Withdrawal due to Marriage Expenses
The recent EPF withdrawal rules also permit an account holder to withdraw up to 50% of the employee’s EPF share to pay for the expenses of a marriage.
The only stipulation is that the marriage must be that of the person concerned, or the EPF holder’s child or sibling. However, this particular provision can be used only after 7 years of PF contribution is completed.
- Withdrawal due to Medical Emergencies
A PF/EPF holder can also withdraw amounts to pay for urgent medical treatment. This is permitted for self-use and to pay for immediate family members’ treatment and related expenses. Individuals are able to withdraw up to 6 months of basic pay and dearness allowance. Alternatively, individuals can opt to withdraw the employee share with the interest from the EPF account. Nonetheless, whichever amount is less out of the two options can be withdrawn.
- Withdrawal due to Specially-Abled Individuals
According to the EPFO, specially-abled EPF account holders can withdraw 6 months’ basic pay and dearness allowance, or the employee share of the EPF balance with interest (the lesser amount considered), to pay any equipment expenses. The EPFO made such a regulation to ease the potential financial burden placed on those individuals who could experience difficulty in paying for costly equipment related to their physical challenges.
- Withdrawal to Pay for Existing Debt
EPF account holders are permitted to withdraw 36 months of basic pay and dearness allowance, or the total of the employer and employee share with interest to pay for home loan EMIs. Nonetheless, this facility is only available to those EPF account holders who have made a contribution of 10 years to the EPF account.
- Withdrawal to Buy Property or Land and for Home Renovation
You can find the EPF withdrawal rules on the EPFO portal. According to these rules, individuals holding an EPF account can undertake a premature withdrawal to buy a plot of land or a house.
Also Read: EPFO: Understanding the Scheme and Benefits
Concluding Lines – Withdrawals Made Easy
EPF withdrawal rules make it flexible enough for employees to use the balances in their EPF account for various reasons and purposes. Furthermore, there is no tax burden on employees with regard to TDS when withdrawals are made after 5 years of consecutive service and EPF contributions are accordingly made.
While navigating the EPFO portal to make withdrawals, it is necessary for employees to have their documentation in order. A UAN, proof of identity and address, information on bank accounts, and a cancelled cheque are among the required documents.
New withdrawal rules have made the system of withdrawal convenient for employees and serve as a way out of many financial challenges an employee may face.
