EPF withdrawal rules 2019: When is partial withdrawal allowed
New Delhi, Sep 03: The Employees' Provident Fund Organisation (EPFO), the Employees' Provident Fund regulator, gives a facility to prematurely withdraw money from the provident fund. 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 for specific purpose like 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.
The main objective of EPFP was to inculcate the habit of mandatory savings among the salaried-class by having an employee provident fund 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, Santosh Gangwar, the Labour minister had announced that soon the Ministry will notify the rate of interest at 8.65 per cent on Employees' Provident Fund (EPF) for 2018-19.
Provident Fund (PF) pre-mature 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 The remaining 25 per cent of the EPF balance can be withdrawn if the person remains unemployed for over two months.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, one 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. 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. 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.
The process of withdrawal has been simple by EPFO. To apply for such withdrawal online, the subscriber must have an active UAN (Universal Account Number) and the mobile number used for activating the UAN number should be in working condition. Single Page Composite Claim Form has been introduced by EPFO to replace multiple claim form like Form 19, Form 10C, Form 31 etc. These claim forms are accepted and processed on self-attestation basis without the need for attestation by the employer.