EPFO: You can withdraw your EPF money for these reasons; know the eligibility and conditions for PF withdrawal

The Employees' Provident Fund (EPF) scheme offers a safety net for post-retirement life of salaried employees working in the private sector. Managed by the Employees' Provident Fund Organisation (EPFO), it mandates contributions from both employees and employers.

The EPF scheme currently offers an annual interest rate of 8.15 per cent.

While the standard practice is to withdraw the accumulated amount after retirement, there are specific circumstances under which premature withdrawals form EPF account are allowed. As per the EPFO guidelines, advances or premature withdrawals are allowed to meet certain emergencies or financial needs for specific purposes.

Let’s take a look at the eligibility criteria and conditions to avail EPF advances.

Unemployment

Unemployment is one of the conditions for which EPF allows premature withdrawals. If an EPF subscriber remains unemployed for a month, they can withdraw up to 75 per cent of their EPF funds. After two months of unemployment, they can withdraw the remaining 25 per cent.

Education and marriage

After seven years of contributions, an account holder can withdraw up to 50 per cent of their employee’s share for education expenses and marriage of siblings, children or specified relatives.

House Purchase or Construction

For purchase or construction of a new house, EPFO allows withdrawals provided that the account holder has been a member for five years.  The withdrawal limit is 24 times the monthly salary for purchasing a plot and 36 times for construction or purchase of a house.

Repayment of home loan

After three years of contribution to the EPF scheme, an advance can be availed for repayment of home loan. A EPFO member can withdraw up to 90% of the accumulated fund for either making the down payment to purchase a house or for the payment of EMIs of home loan.

Medical emergencies

In case of medical emergencies, there's no required minimum service period. An account holder can withdraw funds equivalent to their share with interest or six times their monthly salary. This can be applied for self, parents, spouse, or children.

Remember, withdrawing the entire EPF balance while still employed is not allowed. Also, withdrawals exceeding Rs 50,000 within five years attract TDS.  

Bear in mind that PF, a long-term savings scheme, is designed to support post-retirement needs. While exceptions exist for early withdrawals, use them wisely to ensure a stable and secure financial future.