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PF deposits are a big support for employees working in the organized sector. Employees withdraw money from their PF account when needed. The Employees Provident Fund Organization (EPFO) provides the facility to withdraw money for various needs. Let us tell you that the main objective of the EPF scheme is to financially secure the post-retirement life of workers working in the organized sector through an assured retirement fund and pension. However, employees can withdraw funds partially or fully from their EPF account before the scheme matures. However, recently EPFO has changed the withdrawal rules. After this the tax burden has increased. Let us know what is the new rule of EPFO?
New EPF Withdrawal Rules 2024
Under normal circumstances, if you continue to work regularly without any interruption or gap, you cannot withdraw your provident fund before retirement. However, partial withdrawal of funds is allowed under certain circumstances such as medical emergency, higher education and buying or constructing a house. If an employee loses his job, he can withdraw 75 per cent of his EPF after remaining unemployed for one month and the entire 100 per cent after two months. But for this the employee will have to declare unemployment.
When will 30% tax have to be paid on withdrawal?
For partial or full tax-free withdrawal of PF funds it is mandatory that the PF subscriber has completed 5 years of contribution under the EPFO scheme. However, if the withdrawal amount is less than Rs 50,000, no tax is payable. If the EPF withdrawal amount is up to Rs 50,000 within five years of opening the account, then the EPF subscriber has to pay 10 per cent TDS if he has a PAN card. Without PAN, this tax liability becomes 30 per cent.