EPF Rules: When And How Much Can You Withdraw From Your Provident Fund Account?

The Employees’ Provident Fund (EPF) primarily serves as a retirement savings scheme but allows limited access to funds before retirement for essential needs such as medical emergencies, mortgage payments, wedding expenses, and educational fees. To withdraw from the EPF, individuals must meet specific conditions:

Withdrawal Due To Unemployment

• Individuals who have been unemployed for a month or longer can withdraw up to 75% of their EPF balance.
• If unemployment extends to two consecutive months, the entire EPF balance becomes available for withdrawal.

Premature Withdrawal

• Withdrawals made within the first five years of EPF membership are subject to taxation.
• Withdrawals below Rs 50,000 are not subject to tax deductions.
• Withdrawals exceeding Rs 50,000 are subject to TDS (Tax Deducted at Source).
• Providing a PAN card results in a 10% tax deduction on premature withdrawals.
• If the PAN card is not provided, the TDS rate increases to 30%.

Job Change And PF Transfer

• Individuals transitioning to a new job are not required to transfer their PF funds immediately.
• Once the Universal Account Number (UAN) is activated and the necessary documents are available, the transfer process can be initiated.

Withdrawal After Retirement

• Employees must apply for their final EPF settlement upon reaching 58 years of age, as per EPF Act regulations.
• Employees with at least ten years of service are entitled to benefits under the Employees’ Pension Scheme (EPS).
• Members who have worked for fewer than ten years can withdraw both their EPS and EPF balances.
• Post-retirement withdrawals are tax-free.

EPF Withdrawal For Home Loan Repayment

• EPF members who have maintained their accounts for at least three years can withdraw funds for purchasing a house.
• Under Paragraph 68-BD of the EPF Scheme, 1952, members can withdraw up to 90% of their EPF balance for:
  • Buying a new house
  • Paying EMIs
• The funds can also be used for making a down payment on a home loan.

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