PF OR EPF WITHDRAWAL RULES

The Employees' Provident Fund, commonly known as EPF, or simply PF, is arguably the most secure and highly admired government-regulated mandatory long-term retirement savings scheme for salaried individuals in India. It brings considerable returns, tax benefits and unmatched financial security for employees across sectors. In spite of well-established credentials, there seems to be a lack of clarity around the PF amount withdrawal and EPF withdrawal rules.

Let's find out how much PF can be withdrawn and why one needs to withdraw EPF. We'll review the recently modified PF withdrawal rules or Employees' Provident Fund withdrawal rules and list all the documents required for seamless EPF withdrawal.

Key Takeaways?

●      EPF/PF or Employee Provident Fund is a government-supported retirement savings scheme.

●      The wisest option is to withdraw your EPF after retirement.

●      Pre-retirement partial or full PF withdrawal options are available.

●      Unemployment, health concerns, marriage and education expenses can justify EPF withdrawals.

●      Property purchases, renovations and debt repayments also contribute to PF withdrawal applications.

●      In most cases, employees willing to withdraw EPF must complete a minimum number of service years.

●      There are clear restrictions on the percentage of the Employee Provident Fund one can withdraw.

●      PF withdrawal tax obligations should be adhered to.

●      Applicants should comply with all EPF withdrawal documentation requirements.

●      Individuals can check their PF balance via the web, mobile app, missed calls and text messages.

●      Employees may withdraw their EPF through physical and online processes.

Withdrawal of Provident Fund

As an advisable practice, employees should prefer withdrawing the entire contribution-based EPF amount only after their retirement. That said, subject to specific conditions or reasons, partial and complete pre-retirement withdrawals are also permitted.

Common Permissible Reasons for EPF Withdrawal

You are allowed to withdraw the PF amount (complete or partial) before maturity/retirement only under the following circumstances:

●      At least 1 Month of Unemployment.

●      Addressing Medical Emergencies.

●      Covering the Equipment-costs for Specially-abled Individuals.

●      Paying for Educational Expenses.

●      Spending on Marriage Arrangements.

●      Purchasing Land.

●      House Construction.

●      Home Renovation.

●      Loan/Debt Repayments.

Prominent EPF Withdrawal Rules 2025

●      The revised provident fund withdrawal rules comprise the dos and don'ts, clarify restrictions, if any, and explain how much PF can be withdrawn.

●      Only 75% of the EPF balance can be withdrawn after 1 month of unemployment. The rest requires at least 2 months of unemployment.

●      Partial withdrawal for medical purposes can be equivalent to six months' basic wages and DA, or the employee's share with interest, whichever is less.

●      Withdrawals for specially-abled individuals may be equivalent to six months' basic wages and DA, or the employee's share with interest, whichever is less.

●      Withdrawals for educational/marriage expenses require at least 7 years of service and can be allowed up to 50% of the employee's total contribution to the PF with interest.

●      Withdrawals for land purchase or constructing a new house need a minimum of 5 years of service. You may withdraw 24/36 times of your monthly basic wages and DA, or employee plus employer share with interest, or the total cost, whichever is lower.

●      Home renovation withdrawals can only be initiated after 5 years of service. Applicants can withdraw 12 times their monthly wages with dearness allowance, or employee’s share with interest, or the actual cost, whichever is less.

●      Loan/Debt repayment withdrawals are permissible after 10 years of service. You can withdraw up to 36 times your monthly wages with DA, employee's plus employer's share with interest, or the outstanding principal plus loan interest, whichever is lower.

EPF Withdrawal Tax Liabilities

The withdrawals are tax-free, irrespective of the amount, in case of EPF contributions for 5 or more years. TDS or tax deducted at source only applies when more than INR 50,000 is withdrawn within 5 years.

●      10% TDS deduction on producing the PAN card while withdrawing INR 50,000+ before 5 years.

●      30% TDS deduction when the PAN card is not presented.

●      No TDS on submitting Form 15G/15H.

Documents Needed for EPF Withdrawal

The PF withdrawal rules expect the following documents:

●      Applicant's ID & Address Proof.

●      Bank Account Details.

●      A Cancelled Cheque (stating the account number and IFSC code).

●      UAN or Universal Account Number.

●      Composite Claim Form (Aadhaar).

●      Composite Claim Form (Non-Aadhaar), If UAN Not Activated.

As an employee, you can easily check your PF balance with or without a UAN number by utilizing the EPF India portal, UMANG App, SMS, and missed-call options.

Additionally, you may move towards withdrawing the EPF amount by submitting physical or online applications. COVID-19 and resulting health complications led many to opt for medical emergency PF withdrawals. While EPF brought considerable relief, it cannot be relied upon as a substitute for health insurance.

Reach out to QuickInsure, the premier insurance comparison portal, analyze all available health policies, review their features, benefits and pricing structures, and pick the right cover for your medical insurance needs.

FAQs:

1] Can EPF be Withdrawn Prematurely?

Yes, partial and complete withdrawal requests are allowed as long as they comply with certain pre-defined conditions and limitations.

2] How Much Time Does it Take to Receive the EPF Amount After Applying Online?

It may take up to 20 days.

3] Can I Withdraw EPF While Working?

Yes, you can, only in particular scenarios, after completing a minimum number of service years and by providing relevant documentary evidence.

4] Is TDS Applicable on EPF Withdrawal?

Yes, when more than INR 50,000 is withdrawn before 5 years.

5] How Many Times Can I Withdraw from My EPF Account?

One time to multiple withdrawals, depending on the reasons for your withdrawals.

6] Can I Withdraw the 100% Amount from My PF Account?

Yes, you can, generally during unemployment for 2 months, in the instance of your unfortunate permanent disability, or at the time of retirement.

7] What is the Limit of PF Withdrawal?

Based on the reasons for withdrawals, it may stretch from 50% of your contribution with interest to 90 or even 100% of the accumulated corpus with interest.

 

Published on - 30/09/2015