Employees’ Provident Fund Organisation (EPFO) allows subscribers to withdraw money from their PF account prematurely for several reasons such as medical requirements, house construction, educational needs, etc. The limit for withdrawal will depend on your reason. EPFO also allows subscribers who have subsequently become unemployed, to withdraw funds from their PF accounts.
This is to help those financially who are hit by job losses. This also helps those people financially who have taken a sabbatical from work.
PF Withdrawal rules in case of unemployment:
As per the latest EPFO rules, individuals who are terminated from their job will be allowed to make a withdrawal of 75% of their accumulated corpus after 1 month from when they are terminated. Earlier, one was not permitted to make a withdrawal post one month. If the individual remains unemployed for a tenure of 2 months or more, they are allowed to withdraw the remaining 25% and settle the PF amount completely. This means an unemployed person can withdraw 100% of their PF money after two months of being jobless.
EPF account holders are also not supposed to submit any unemployment-related documents to the EPFO to withdraw the amount since the pause in EPF deposits is considered a sign of unemployment. Note that the advantage of not withdrawing 100% of the amount is that your PF account membership remains intact allowing you to transfer your remaining balance to a new employer. If your account remains active, you can also draw a pension at the time of retirement.
Withdrawal rules of women getting married:
If you continue to remain jobless for two months, you can then withdraw you entire PF corpus and close your EPF account. According to an EPFO order, the requirement of 2 months of waiting period does not apply to women who resign from their job to get married.
Rules of people above 54 years of age:
Subscribers who have crossed the age of 54 years are allowed to withdraw up to 90% of their PF balance at any time after crossing 54 years but within one year of retirement on superannuation, whichever is later.
Income tax on PF withdrawal:
In case of EPF withdrawal after 5 years of continuous service, the amount withdrawn (both principal and interest) is exempt from tax. If the withdrawal happens before completion of 5 years of continuous service, it is fully taxable. However, withdrawal made before 5 years due to the ill health of the employee or discontinued business of the employer or for any other reason beyond the control of the employer is also exempt from tax.
How to withdraw from EPF account:
Raising a PF withdrawal claim is very easy now. You can file a withdrawal claim using your UAN on the EPFO portal. Make sure that the UAN has been activated and that the bank details and KYC documentation has been updated on the PF portal.
Step 1: Log in to EPFO’s unified portal with your UAN and password.
Step 2: On the ‘Our Services’ tab, select the ‘Claim’ option from the drop-down list.
Step 3: You will find three types of withdrawal claim — full withdrawal, partial withdrawal, or pension withdrawal — in ‘I Want to Apply For’ section. The drop-down box with types of withdrawal will be displayed only if you are eligible to avail it.
Step 4: The PF amount will be credited directly to your bank account after it is approved…Read more>>