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Provident Fund (EPF), which is deducted every month from the salary of employed employees, is not just a mandatory savings but is considered to be the biggest financial security cover after retirement. Whenever major financial needs arise in life like marriage, higher education of children, construction of a house or any sudden serious medical emergency, the first glance of most of the employees goes to the amount deposited in their EPF account. Often this question arises in the minds of many account holders that can they withdraw 100% of their PF money in one go whenever they want? As per the rules of Employees Provident Fund Organization (EPFO), it is not possible to withdraw 100% of the funds arbitrarily at any time while continuing in the job. EPFO has set some very clear and strict withdrawal conditions to safeguard the future of the member, under which full withdrawal or partial advance (non-refundable advance) is allowed only in special circumstances.
According to EPFO rules, as long as an employee is employed in an organization and his PF contribution is being deposited regularly, he cannot withdraw 100% of the amount (employee + employer share + interest) from his account. This has been done so that the basic structure of the employee’s retirement fund is not destroyed. The entire 100% of PF money can be withdrawn in lump sum only in certain special and exceptional circumstances:
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Retirement: A member can withdraw 100% of his PF on completion of 58 years of age or at the time of official retirement (after completion of 54 years of age, withdrawal of up to 90% is allowed 1 year before retirement).
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Unemployment: EPFO allows phased withdrawal in case of job loss or resignation. If a member remains unemployed for 1 month continuously, he can withdraw up to 75% of his PF balance. If the period of unemployment continues for 2 months (or more) and contributions are not started in a new job, the remaining 25% i.e. 100% of the total fund is allowed to be withdrawn.
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Permanent residence abroad or total disability: If a member has left India and is permanently settling in any other country or has been declared completely incapable of working (Permanent Disability) due to any accident/illness, then he can claim 100%.
EPFO has provided maximum relief to the members when unexpected health crisis comes in their life. The rules for withdrawing non-refundable advance from PF account for the treatment of self, spouse, children or dependent parents are extremely liberal:
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Minimum service period: There is no minimum service requirement for treatment. Even if an employee has been employed for only a few months, he or she can still file a claim on medical grounds.
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Maximum Withdrawal Limit: The member can withdraw an amount equal to 6 months of his basic salary and dearness allowance (DA) or his total employee share along with interest, whichever is less. In critical cases, advances up to ₹1 lakh are sanctioned instantly under auto-mode settlement.
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How often can it be removed (Frequency): There is no maximum limit or restriction on advance withdrawal for medical emergency (No Frequency Cap). As long as you have a valid balance in your account and you submit the required medical documentation or self-certification, you can apply again and again as needed.
EPFO also allows partial withdrawal to meet the rising expenses of marriage ceremony in the family, but for this it is necessary to fulfill certain eligibility conditions:
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Objective and Eligibility: This advance can be withdrawn only for one’s own marriage, marriage of son or daughter, or marriage of a real brother or sister.
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Minimum Terms of Service: For this, it is mandatory for the member to complete minimum 7 years of continuous service in EPFO. If the employment is less than 7 years, the claim in the name of marriage is rejected.
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Withdrawal Limit: Only a maximum of 50% of the total amount of the member’s own contribution (Employee Share) and the interest earned on it can be withdrawn. The company’s share is not included in this.
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How many times can you take: Withdrawal for the purpose of marriage is allowed only a maximum of 3 times (up to 5 times under special circumstances as per rules) during the service period.
Advance can also be withdrawn from PF account to meet the huge expenses of children’s post-matriculation or professional degree courses:
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Eligibility and service period: For this also, it is mandatory for the employee to have completed minimum 7 years of active service under EPFO.
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Withdrawal Limit: Only a maximum of 50% of the member’s total employee contribution and the interest received on it is approved.
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Frequency (how often withdrawals are possible): A member can claim for higher education a maximum of 3 times (with a graded allowance of up to 10 times as per requirement under recognized higher education rules) during his/her entire career. The fee structure or admission letter of the recognized educational institution has to be attached with the application.
To fulfill the dream of building one’s own house, EPFO has made provision for the largest withdrawal slab:
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Purchase or construction of house: On completion of minimum 5 years of service, the member can withdraw his/her basic salary + DA equal to 24 to 36 months, or up to 90% of the total share of employee and employer along with interest. This facility is available only once in the entire service period.
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Repayment of Home Loan: If the home loan is in your name or in joint name with your spouse, up to 90% of the funds can be withdrawn one time to repay the outstanding loan depending on the minimum service of 3 to 10 years.
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Home Repairs/Alterations: After 5 years of construction of the house, the amount of basic + DA for 12 months can be withdrawn maximum twice for repairs.
EPFO has now made the claim process completely digital and paperless. For this, your Universal Account Number (UAN) must be active and Aadhar Card, PAN Card and Bank Account Details (KYC) must be completely verified on the EPF portal.
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Claim Filing Process: Members login to EPFO’s Unified Member Portal or UMANG App. After this, go to ‘Online Services’ menu and select ‘Claim (Form-31, 19, 10C & 10D)’. Verify by entering the last 4 digits of your bank account and select the appropriate form and reason from the drop-down as per the purpose for which the money is required (illness, marriage, education or complete withdrawal). Once the claim is submitted through Aadhaar OTP, the amount is directly credited to the bank account within 3 to 7 working days.
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Tax and TDS rules: If your total service period is less than 5 years and the withdrawal amount is more than ₹50,000, 10% TDS is deducted if PAN card is linked (this rate goes up to 30% if there is no PAN). Any withdrawal made after completion of 5 years of continuous service is completely tax-free. If service is less than 5 years but your total annual income is less than the taxable limit, Form 15G or Form 15H can be uploaded online to avoid TDS.