Understanding Withdrawal Rules for Employees’ Provident Fund (EPF) in India
Interested in knowing the dos and don'ts of withdrawing your EPF? This comprehensive guide will help you understand the conditions under which you can withdraw your EPF account balance, including both regular and partial withdrawals.
General Withdrawal Rules for EPF
The Employees' Provident Fund (EPF) scheme ensures a secure financial future for employees. Here are the key points to remember when considering a withdrawal from your EPF account:
Under a provision, non-refundable withdrawals can be made up to the extent of basic wages and dearness allowances for three months, or up to 75% of the amount standing to your credit in the EPF account, whichever is less. Members can also apply for a smaller amount.
If you are unemployed for two consecutive months after resignation, the EPF amount can be withdrawn entirely. However, if the service period is 5 continuous years or more, this withdrawal is not taxable. Otherwise, withdrawals are subject to taxation as per the applicable tax deductions at source (TDS).
Important Withdrawal Conditions
Retirement: When you retire and fulfill the eligibility criteria, full EPF balance can be withdrawn. Unemployment: EPF can be accessed if you have been unemployed for two or more months since the last job. Death: If the employee passes away before the specified retirement age, the EPF can be withdrawn by the nominee or legal heir.Partial Withdrawals and Transfers
EPF is not to be withdrawn if you are currently employed with the latest job. However, it can be transferred to a new account through an online process if there is a change in your employment. This transfer can happen without any withdrawal under the given condition.
Important Points to Cover:
Withdrawals made before the completion of five years of account opening are taxable. If you are considering a partial withdrawal for purposes like medical expenses, there are specific rules and conditions applicable. For example, if the leverage is for meeting ‘medical treatment expenses’, stringent rules apply, and you should refer to the guidelines for specific purposes.
Information About PF
For more detailed information regarding EPF, please click here.
Conclusion
Understanding the rules for EPF withdrawal is crucial for making informed financial decisions. Whether you are considering a full or partial withdrawal, always ensure you adhere to the prescribed rules to avoid any complications.