Employees’ Provident Fund (EPF) is a kind of investment fund built over a long term on the contributions made by the EPF account holder (i.e. employee), employer, and the government (in a few cases). EPF is administered by the Employees’ Provident Fund Organization (EPFO) to provide some financial security to people once they retire. As per the current EPFO guidelines, EPF members can conveniently access their PF funds to cater to any financial difficulties resulting from the Covid-19 pandemic. Under new EPF withdrawal rules, Provident Fund (PF) account holders can make withdrawal claims online up to 75% of their net balance in the PF account or 3 months of their basic salary & dearness allowance, whichever is lower. Online claims are stipulated to be settled within 72 hours and offline claims may take up to 20 days for settlement.
There are various EPF withdrawal rules that account holders need to adhere to for withdrawing funds from their PF account.
EPFO has revised its many rules regarding withdrawal from the PF account in 2021 with the aim of providing PF account holders with easier access to their PF funds who are facing financial difficulties due to COVID-19 pandemic. Under the new rules, PF members can withdraw money equivalent to their 3 months’ basic salary + dearness allowance or 75% of the total balance available in their EPF/PF account, whichever is lower. It will be considered as a non-refundable deposit and members can raise withdrawal claims online. The timeline stipulated for settling online claims is within 3 working days and up to 20 days for offline claims settlement.
The PF amount can be withdrawn for various reasons such as for house construction/addition, marriage expenses of self/children/siblings, post matriculation education of children, medical expenses, natural calamity, purchase of equipment for physically handicapped, factory closure, cut in electricity in establishment, and so on.
The eligibility for EPF withdrawal is different for different situations. Below are the detailed eligibility criteria based on situations:
PF account holders can make the following three different types of PF withdrawals through the EPFO member portal with the attestation of their employer if they have linked their Aadhaar card details with their UAN:
The PF member can withdraw PF amount only in the following conditions:
|Reasons of Withdrawal||Eligibility||Withdrawal Limit|
|Construction of house or plot purchase||24 times of monthly salary for purchasing and 36 times of monthly salary for purchase and construction or the cost of the property or the total shares of of employee and employer with the interest amount, whichever is less|
|Repayment of home loan||90% of the PF balance|
|Renovation or alteration of house||12 times of the monthly salary|
|Wedding||50% of the employee’s contribution along with interest|
|Medical treatment||Employee’s share along with interest or 6 times of the monthly salary, whichever is lower|
To ensure the process of making a withdrawal is seamless, subscribers have to meet the requirements that are listed below, if they wish to carry out a withdrawal without the attestation of their employer.
Employees can make a PF withdrawal claim on the EPFO member portal by following the steps mentioned below. As already mentioned, if the employee has seeded his/her Aadhaar card details with one’s UAN account, they do not require the attestation of their employer to make a PF withdrawal.
Under EPF money withdrawal rules, TDS is deducted on EPF withdrawal before completing 5 years of service at a rate of 10% on withdrawal if the PAN is furnished and 34.608% if the PAN is not furnished. However, if the amount of withdrawal is below Rs. 50,000, TDS is not deducted. TDS rule does not apply when termination of your service is not in your control due to reasons including company lockouts, retrenchments, employee layoffs, etc. Also, TDS is not applicable if the service cannot be continued because of some serious medical condition like physical disability, mental disability, etc.
As per the previous rule, 100% EPF withdrawal was allowed after 2 months of unemployment. However, under the new rule, EPFO permits withdrawal of 75% of the EPF corpus after unemployment of 1 month. The remaining 25% can be transferred to the new EPF account of the EPF member after gaining new employment. Up to 90% of the EPF corpus can be withdrawn after retirement (before 1 year of retirement, if the person is not less than 54 years old). However, early retirement is not considered until the member reaches 55 years of age.
PF members can withdraw PF amount up to 75% (depending on the situation) within the 5 years. However, withdrawing PF amount before 5 years of account opening will attract tax.
You can withdraw your EPF money online as well as offline:
As per the new rule, EPFO permits withdrawal of 75% of the EPF corpus after 1 month of unemployment. Only in the case of resignation from service, a member has to wait for a period of 2 months for withdrawal of the PF amount.
Yes. As per the PF taxation rules, TDS is deducted on EPF withdrawal before completing 5 years of service at a rate of 10% on withdrawal if the PAN is furnished and 34.608% if the PAN is not furnished. However, if the amount of withdrawal is below Rs. 50,000, TDS is not deducted. TDS rule does not apply when termination of your service is not in your control due to reasons including company lockouts, retrenchments, employee layoffs, etc. Also, TDS is not applicable if the service cannot be continued because of some serious medical condition like physical disability, mental disability, etc.
EPFO permits withdrawal of 90% of the EPF corpus 1 year before retirement, if the person is not less than 54 years old. However, members can withdraw EPF amount before retirement as well. The withdrawal limit is situation and reason based.