New Delhi: The Employees’ Provident Fund Organisation (EPFO), the Employees’ Provident Fund regulator, has a facility of premature withdrawal with which a definitive proportion from provident fund balance can be withdrawn. However, the individual is only allowed to withdraw a partial amount from the provident fund account before the completion of maturity, except for the case of unemployment.
According to EPFO, individuals are eligible to withdraw provident fund balance in case of marriages of children, their higher education, repayment of home loans, emergent medical conditions, renovation of home, purchase or construction of a house, purchase of land and at a certain age before retirement.
Ascertaining a mandatory savings habit among the salaried-class was the prime objective behind the incorporation of employees provident fund (EPF) account. With an attractive interest rate of 8.55 per cent, a sizeable corpus can be built till the age of retirement. Earlier last month, Labour Minister Santosh Gangwar has said that the Labour Ministry will soon notify rate of interest of 8.65 per cent on Employees’ Provident Fund (EPF) for 2018-19.
However, certain provisions have been put in place to address the urgent requirements of people under which a person is allowed for premature withdrawals from the EPF account.
Provident Fund (PF) withdrawal rules 2019
- Unemployment: According to the latest EPF rules, a person is allowed to withdraw up to 75 per cent of the total EPF balance on being unemployed for one month after quitting a job. The remaining 25 per cent of the EPF balance can be withdrawn if the person remains unemployed for over two months.
- Retirement: After attaining the age of 54 years and within one year of retirement/superannuation (whichever is earlier), a person is eligible to withdraw up to 90 per cent of the provident fund balance.
- Marriage/education of children: In case of monetary requirement for the purpose of marriages or post matriculation education of children, you can withdraw up to 50 per cent of the employee share with interest-only after completion of 7 years.
- Handicapped: In case of handicapped people, the EPFO body allows partial withdrawal from the EPF balance for purchasing equipment for minimising hardship on account of handicap. Under this, a person can withdraw six month’s basic wages and dearness allowance (DA) or employee share with interest or cost of equipment, whichever is the least.
- Illness: A person can apply for partial withdrawal from the EPF balance for the treatment of illness in certain cases. For self-usage or for the treatment of family members, EPFO allows a person to withdraw 6 month’s basic wages and DA or employee share with interest, whichever is the least.
- Loan repayment: For the repayment of home loan EMIs, an individual is eligible to withdraw 36 month’s basic wages and DA or total of employee and employer share with interest or total outstanding principal and interest, whichever is least, only after completing the 10-year membership period.
- Purchase of land/house: A person is allowed for premature partial withdrawal from the EPF account for purchasing land or house only after completion of five years as a member of EPFO. For the purpose of purchase of house/flat/construction of house including acquisition of site, an individual is allowed to withdraw the total of employee and employer share with interest or total cost or 24 month’s basic wages and DA (for purchase of site)/36 month’s basic wages and DA (for purchase of house/flat/construction), whichever is lower.
- House renovation: Interestingly, EPFO also has a provision of partial premature withdrawal for addition/alteration/improvement in the house owned by member/spouse/jointly with a spouse. Under this, a person can withdraw 12 month’s basic wages and DA or employee share with interest or cost, whichever is the least. This facility can be availed two times, first time, after five years of completion of the house and, for the second time, after 10 years from withdrawing the balance for the first time.