Employees’ Provident Fund (EPF) is one of the most trusted schemes for saving for retirement in India. In this, both the government or private employee and the employer contribute 12%. Every year the Employees’ Provident Fund Organization (EPFO) gives fixed interest on it. This entire amount is received after retirement. But, under certain circumstances, you can withdraw Provident Fund (PF) money even before retirement. Let us understand in detail under which circumstances and how much EPF advance (partial withdrawal) can be withdrawn during the job.
Withdrawing PF in the serious medical emergency is the easiest
EPFO has made the rules for health-related needs the easiest. Any member can now withdraw total money at any time. There is no condition of 7 years of membership for this, which is there in many other withdrawals. You can withdraw a maximum of 6 months basic salary + DA or the total amount of your share, whichever is less. This facility is applicable for the treatment of the employee, his spouse, children or parents. It provides immediate financial assistance when it is needed the most.
You can also withdraw PF money for children’s education
If you have contributed to EPF for at least 7 years, you can withdraw money from your PF account for your children’s post-matric education (post-matric education after 10th). This withdrawal is based on the employee’s share of the deposit amount and the interest received on it. This means that the employer’s share of the deposit amount cannot be withdrawn. A total maximum of 50% of the amount is now allowed to be withdrawn. This facility is only for the higher education of children. It can be also used only the three times in total. This can be an important financial tool for the bright future of your children.
EPF advance is also available for marriage
EPFO also allows its members to withdraw money from PF for their, children’s or sibling’s marriages. Here too, a minimum of 7 years of membership is required. The employee can withdraw a maximum of 50% of his share of the deposit amount and the interest received on it. This facility can also be availed only three times, whether it is for studies or marriage. Therefore, it should be used wisely.
PF money can also be withdrawn to buy, construct a house, or repay a home loan
If you want to buy a house or flat or construct a house yourself, a minimum period of 5 years is required for EPF withdrawal. The maximum withdrawal is based on 24 to 36 months of basic salary + DA or total contribution (employee + employer + interest) or cost of the house, whichever is lower. Also, if you have taken a home loan, then after a period of 10 years, you can withdraw an amount up to 36 months of basic salary or loan outstanding, whichever is lower, to repay it. This facility can help realize your housing dream.
You can also withdraw PF money for home repairs
If you had withdrawn money from EPF to build a house, and now it has been more than 5 years, then you can withdraw money again for repairs. This withdrawal can be done only once every 10 years. One year before retirement, if you are 54 years of age or above and you are one year away from retirement, you can withdraw up to 90% of the amount from EPF. This withdrawal can be done only once. After this, the remaining amount is available at the time of pension or full withdrawal. This helps you to remain financially strong close to retirement.
You can withdraw PF money even upon being fired
If an employee has been fired from his job and is challenging this decision in court, then he can withdraw up to 50% of the total deposit amount of his share. At the same time, if the company is closed for 15 days or more and you are not getting a salary, then you can withdraw the amount of your share. If you do not get a salary for 2 months (except strike), then also PF can be withdrawn. This provision provides you with financial assistance in difficult times of unemployment.
You can also withdraw PF money to invest in a pension scheme
Members who have completed the age of 55 years can withdraw up to 90% of the EPF amount and invest in schemes like Varishtha Pension Bima Yojana. This option is for those who want a regular pension. It provides you with a stable income source after retirement.
You can also withdraw PF money in case of a power cut
Although this situation is very unusual, if there are a lot of power cuts in your area, then you can withdraw one month’s salary or ₹ 300 or the amount of your share, whichever is less. For this, the member has to use EPF Form 31. This provision has been made to provide you with financial assistance even in unexpected circumstances.