PF members are allowed to fully or partially withdraw balance from their account. EPF Partial Withdrawal Rules, EPF Advance, Partial Withdrawal Rules Check EPF Partial Withdrawal Rules , EPF is safety net for middle class. The EPFO has also launched the UAN (Universal Account Number) which has enabled subscribers to merge multiple PF accounts as well as make withdrawals from their account without the attestation of their employer – provided that they have seeded their Aadhaar card details with their UAN.
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EPF Partial Withdrawal Rules
Latest News – Interest rate on PF deposits decreased to 7.10% from 7.90% for the FY 2019-20.
What is EPF?
EPF refers to Employees Provident Fund, which is maintained by EPFO (Employees Provident Fund of India). This organization requires that any organization having more than 20 employees should be registered.
This is a retirement plan which is open to salaried employees only.Every year , EPF receives contribution from employees and employer @ 12% each.This amount accumulates at prescribed interest rate.
Limits of EPF Partial Withdrawal:
Employees can make withdrawals based on the below listed circumstances. Listed below is the withdrawal purpose, the minimum service requirement to be eligible to make the withdrawal, the PF withdrawal limit and the relations for who the employee can make the withdrawal.
Partial withdrawal of EPF can be done under certain circumstances and subject to certain prescribed conditions which have been discussed in brief below:
| Reason for withdrawal | Limit for withdrawal | No of years of service criteria | Other conditions |
|---|---|---|---|
| Marriage | Up to 50% of employee’s share of contribution to EPF | 7 years | For the marriage of self, son/daughter, brother/sister |
| Education | Upto 50% of employee’s share of contribution to EPF | 7 years | For the education of either himself or his children after class 10 |
| Purchase of land / purchase or construction of a house | For land – upto 24 times of monthly wages plus Dearness allowance
For house – upto 36 times of monthly wages plus Dearness allowance | 5 years | The asset i.e. land or the house should be in the name of the employee or spouse or Jointly. |
| Home loan repayment | Upto a maximum of 90 %, from both employee’s contribution and employer contribution in Employee Provident Fund. | 10 years | i. The property should be registered in the name of the employee or spouse or jointly
ii. Withdrawal permitted subject to furnishing of requisite documents as called for by the EPFO relating to the housing loan availed, iii. The accumulation in the member’s PF account (or together with the spouse), including the interest, has to be more than Rs 20,000. |
| Renovation of house | Up to 12 times of the monthly wages | 5 years | The property should be registered in the name of the employee or spouse or jointly. |
| A little before retirement | Upto 90% of accumulated balance with interest | Once he reaches 57 years ( as per recent amendment) | For himself |
Steps to apply for EPF withdrawal online:
- Step 1: Go to the UAN portal by clicking here
- Step 2: Login with your UAN and password and enter the captcha.
- Now Step 3: Then, click on the tab ‘Manage’ and select KYC to check whether your KYC details such as Aadhaar, PAN and bank details are correct and verified or not.
- Next Step 4: After the KYC details are verified, go to the tab Online Services’ and select the option ‘Claim’ from the drop-down menu.
- Step 5: The ‘Claim’ screen will display the member details, KYC details and other service details. Click on the tab ‘Proceed For Online Claim’ to submit your claim form.
- Step 6: In the claim form, select the claim you require i.e full EPF Settlement, EPF Part withdrawal (loan/advance) or pension withdrawal, under the tab ‘I Want To Apply For’. If the member is not
eligible for any of the services like PF withdrawal or pension withdrawal, due to the service criteria, then that option will not be shown in the drop-down menu.
Latest PF Withdrawal Rules 2020
In order to ensure that employees continue to be enrolled in the scheme and avoid making withdrawals from their PF corpus and instead save it for the future or for retirement.
EPFO has listed a number of PF withdrawal rules. They are as follows.
- All withdrawals made before completion of 5 years of continuous service are subject to tax. Withdrawals after completion of 5 years of continuous service in the EPF are tax free.
- If in case the employee was terminated or is unemployed as a result of ill-health and so on, withdrawals will not attract tax.
- If the employee makes a withdrawal before the completion of 5 continuous years in the scheme, the principal amount as well as the interest accrued is subject to tax. That said, the amount will be taxable in the current financial year.
- For withdrawals before completion of 5 continuous years towards the scheme, the employee will be taxed 30% of the principal amount and the interest accrued if he/she has not submitted their PAN to the EPFO authorities. If the employee has submitted his/her PAN details to the EPFO authorities, 10% TDS (tax deducted from source) will be applicable.
- Funds transferred from one’s PF account towards the National Pension Scheme (NPS)) will not attract tax when one makes a withdrawal.
- If the employee shifts jobs and in the process has different PF account, it will be considered as continuous service to the scheme provided there has been no gap in contributions.
- Employees have to facilitate the use of the Composite Claims Form to make a partial withdrawal or a final settlement claim.
- If the employee has seeded his/her Aadhaar card details with their UAN, they can submit the Composite Claims Form to make a withdrawal directly to the EPFO without the requirement of the attestation of their employer. Those who have not seeded their Aadhaar card details with their UAN have to submit the Composite Claims Form with the attestation of their employer to make a withdrawal.
Reasons which are partial Withdrawal is permissible
For marriage (self, siblings or children)
Withdrawal for this reason allowed only thrice during service.Maximum amount allowed to be withdrawn can’t be more than 50%.Mandatory attachments for this reason would be Form 31 and proof of marriage for verification by the employer.
For Education (Self and children)
Available only for post SSC examination courses.For education and marriage , both the reasons together , Withdrawal is permissible thrice only.
For purchasing or constructing house or flat
Certain conditions to be satisfied
- The property should be in name of employee or spouse or joint name with spouse.
- Completion of 5 years of service
- Maximum permissible Withdrawal – 24 times monthly wages (for land) and 36 times monthly wages (for house or flat ) Proof of registration to be given at the time of availing this facility.
Repayment of housing loan
Minimum number of years of service is 10 years.However , you can either withdraw for purchasing land, flat, house or for repayment of housing loan. Withdrawal not allowed for both the reasons. Maximum Permissible Withdrawal – 36 times of monthly wages
Cherry on top is that you can enjoy Withdrawal from employee and employer contribution both.
Repairs or Alterations to Existing house
Maximum Permissible Withdrawal – 12 times monthly wages
Completion of 10 years of service is mandatory.
Withdrawal for this reason is permitted only once.Also house has to be more than 5 years old .
For Medical emergencies
Withdrawal permitted at any time during the service.However maximum permissible Withdrawal is only 6 months wages.
CONCLUSION
EPF is primarily a facility given to employees for long term wealth creation, the amount accumulated in the EPF accounts get compounded at rate of interest, which results in larger sums of money in later half of the life. Even though, partial Withdrawal allows to take money out, be aware to use it for appropriate reasons, where you cant arrange for money on your own.
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