Almost all employees working in India have a PF (Provident Fund) account. This account works like a savings account, where employees deposit 12 percent of their salary. The company also adds the same amount. You also earn interest on the amount saved in this account. If needed, you can withdraw this money. EPFO has given many easy online options to withdraw money. But if you withdraw money by giving wrong information, action can be taken against you.
According to the new EPF rules, employees can now withdraw up to 90 percent of the amount from their PF to buy their first house. This includes the down payment, building a new house, or paying home loan EMI. Earlier, to withdraw money for this purpose, members had to work continuously for five years.
New Rule for PF Withdrawal
According to the new rule, members can withdraw money only after three years of opening their EPF account. This PF advance withdrawal option can be used only once in a lifetime. These changes have been made under Para 68-BD of the EPF Scheme 1952.
Withdrawing Money by Giving Wrong Information is Risky
The Employees Provident Fund Organization (EPFO) shared a post on social media platform X saying that PF money should be withdrawn only for valid reasons like marriage, education, medical treatment, or house construction. If someone withdraws money by giving a false reason, EPFO can take recovery action. For example, if you withdraw money for medical treatment but later use it to buy a new mobile phone, this is wrong. In such a case, the withdrawn money can be recovered.
How Much Money is Deposited in PF?
EPFO takes care of the PF of private sector employees. In EPF, an employee puts 12% of his basic salary and dearness allowance every month. The company also puts the same amount. From the company’s share, 8.33% goes to the Employee Pension Scheme (EPS) and 3.67% goes to EPF. The current interest rate on EPF is 8.25% per year.