Provident Fund allows salaried employees to invest and profit after retirement.It is a government-run retirement savings plan for employees who can contribute monthly. EPFO supervises the procedure (Employees Provident Fund organisation).
PF Advance Withdrawal
Any business with more than 20 employees must register for PF with the EPF. The Employees Provident Fund (EPF) was founded in 1952. All rules and regulations are defined by EPF. EPFO is managed by the Ministry of Labour and Employment. Many employees are unaware of the procedures to Withdraw PF Advance during financial emergencies. Let’s know about PF withdrawal rules.
PF Withdrawal Rules
In 2023, the Employees’ Provident Fund Organisation (EPFO) altered a number of its withdrawal restrictions for Provident Fund (PF) accounts. The goal of these improvements is to make it easier for subscribers who are suffering financial difficulties as a result of the coronavirus outbreak to access their PF money.
The new regulations allow PF account holders to withdraw up to three months’ worth of their basic pay + dearness allowance, or 75% of the net amount in their PF Registration account, whichever is less. This amount is a non-refundable deposit. These requests for withdrawal can be made online through EPF Form 15G. Online claims must be settled within three business days, but offline claims can take up to twenty days.
Reasons for PF Withdrawal
The recent reforms have made it simpler for workers to Withdraw PF Advance, providing timely relief in crucial situations. The conditions under which you may withdraw funds from your EPF while you are still employed
1. Medical Therapy
If the following conditions are met, you may withdraw funds from your EPF account- https://unifiedportal-mem.epfindia.gov.in/ to pay for medical expenses:
- Any significant surgical procedure performed at a hospital
- More than a month is spent in the hospital
- The individual is on leave that has been authorised by the employer due to his or her Tuberculosis, Leprosy, Cancer, Mental Derangement, Paralysis, or heart difficulties, etc
During the duration of your service, you are able to withdraw your EPF funds at any moment. It is not necessary to have completed a certain number of years with the organisation in order to be eligible for this payment. Even if you have been with your present organisation for one or two years, you can always withdraw cash for therapy.
You must also note that the maximum loan amount you can receive is six months’ salary. This sum may not be particularly large, but it will nevertheless provide you with some assistance in an emergency. This advantage is not only available at any moment but it may also be utilised as frequently as desired. Thus, your PF will without a doubt save you.
You can use our GST Calculator Online to know how much GST you owe before you register.
2. Intentions of Marriage
If you have completed seven years of service, you may withdraw funds from your EPF for a special occasion such as a wedding. You may utilise up to fifty percent of the funds in your EPF account up to three times. Therefore, let’s assume that you have approximately 5 lacs INR in your EPF account. However, you must not compute the full sum when you seek to withdraw funds for your wedding. You are responsible for calculating only your own EPF contribution and the accumulated interest on it. The following are applicable cases:
- Your Own Wedding
- Your Child’s Wedding
- Your Sibling’s Nuptials
3. House Construction or Property Acquisition
If you want to buy or build a house, you can take money out of your EPF. However, you must first get familiar with a few guidelines
- The land or home you seek to acquire must be in your name, your spouse’s name, or both of your names. Other permutations are not allowed
- The maximum amount that can be withdrawn from your EPF account is 24 times your monthly income if you have completed a five-year period of service
If the property you wish to purchase is involved in a dispute, it must first be cleared of all such conflicts before you may purchase it. It must be a Registered property and documentation of registration must also be presented.
4. Repayment of the Current Mortgage
If you have a home loan and want to pay it off early, you can take money out of your EPF. However, you must have served for ten years to be eligible for this reward. However, this advantage can only be utilized once in a lifetime. Additionally, the EPF can be utilized for either the purchase of a home or property or the repayment of an existing mortgage. You cannot obtain funds for both individuals.
The property for which you are paying must be in your name, your spouse’s name, or jointly in your and your spouse’s names. Numerous individuals have co-signed mortgages with siblings or parents. In such a circumstance, you will be unable to utilize this benefit. The EPF allows you to withdraw a sum equal to 36 times your monthly wage to pay down your existing mortgage.
Use Vakilsearch’s PF Maturity Calculator to figure out how much money will be accumulated in your EPF account when you retire.
5. Academic Objectives
You can take a portion of your EPF for educational purposes. Only post-high school education expenses are eligible for this benefit. This means that if you enroll your child in college or university, you will be entitled to withdraw funds from your EPF account. Before qualifying for this benefit, you must have completed seven years of service.
6. Alterations and Repairs to Your Home
After living in a residence for a number of years, you may conclude that it needs maintenance. Modifications may also be an option that may facilitate your convenience. This, however, is a pricey endeavor that could easily drain your bank account. For this purpose, you can withdraw funds from the EPF. Nevertheless, you must first learn the rules.
- Up to 12 times your monthly earnings can be taken out.
- Repairing a residence that is more than five years old is mandatory
- For consideration, you must have a minimum of 10 years of service
- Once in a lifetime is the sole opportunity to utilize this service
- You or your spouse must own the house that you intend to remodel in order to be eligible for a home improvement loan.
Other Reasons for PF Withdrawal
- When you achieve the age of retirement eligibility
- If they have been out of work for more than two months or sixty days, they are eligible for unemployment benefits
- If they intend to relocate overseas permanently
- If a female employee resigns for reasons such as pregnancy, childbirth, marriage, etc. She is entitled to severance pay
Job Loss
In such instances, up to 75 percent of the EPF balance, including the member’s contribution, the employer’s share, and interest. 25% of the remaining amount can be removed after two months of unemployment.
EPF Partial Withdrawal Restrictions
Following are the criteria under which employees may make withdrawals: the reason for the withdrawal, eligibility requirements, maximum PF withdrawal amount, and family members for whom the employee may make a withdrawal are all given below.
Fund for Unemployment Compensation
- Those who have just lost their jobs and have an EPF account can take money out of their PF accounts. It assists not only individuals who have lost their jobs, but also those who have taken a sabbatical or are attempting to launch a new business
- After more than a month of unemployment, EPFO regulations allow jobless EPF account holders to get a non-refundable advance of up to 75% of their account balance
- Additionally, you are prohibited from submitting any documentation pertaining to unemployment to the EPFO, as a gap in EPF contributions is regarded as evidence of unemployment
- It is advantageous to get an advance because you can keep your PF account membership while changing jobs.If your account is active when you reach retirement age, you may be entitled for a pension
- You may withdraw your full corpus and shut your EPF account if you remain unemployed for two months
- The EPFO order states that the requirement of a 2-month waiting time does not apply to women who quit their jobs to be married
- Over the age of 54 years can take up to 90% of their PF amount at any time after reaching 54 or within one year of retiring on superannuation, whichever comes first.
Withdrawals From the EPF That Are Taxable
The amount withdrew (principal and interest) is tax-free if the withdrawal occurs after five years of continuous service. If the withdrawal happens before the end of 5 years of continuous service, the entire sum is taxed. Contact the experts at Vakilsearch for additional information on the provident fund and other applicable programs. Your EPF can only be withdrawn up to 50% of your employee share at the time of withdrawal application. You may withdraw money three times for the same purpose.
FAQs
Yes, EPF withdrawal is allowed after 2 months of continuous unemployment. Members can withdraw their own contribution and interest earned on it, but not the employer's contribution and its interest. Check with your local EPF office for specific rules in your area.
PF can be withdrawn during service for specific purposes like illness, buying a house, education, or marriage. A member can withdraw up to three times, but each time has to be after a minimum interval of five years from the previous withdrawal.
As per the current rules of the Employees' Provident Fund Organization (EPFO), an employee can apply for PF advance for illness up to a maximum of six times in a year. However, the amount of advance depends on various factors like the employee's salary, PF balance, and the purpose of the advance.
The processing time for PF withdrawal is around 10 days from the date of submission of the claim. However, it may take longer if the claim requires any additional verification or if there are any discrepancies in the submitted documents. Is EPF Withdrawal is Allowed After 2 Months of Unemployment?
How Many Times PF Can Be Withdrawn During Service?
How Many Times Can I Apply for PF Advance for Illness?
How Many Days Will Pf Withdrawal Take?
Conclusion
Timely repayment, after you Withdraw PF Advance, ensures that you maintain the health of your retirement savings for the future. Hope this blog is helpful. For any queries contact Vakilsearch.
