The Buyt Desk
The Employees Provident Fund (EPF) is a retirement saving scheme for salaried employees managed by the Government of India. The EPF is a mandatory contribution which an employee and his/her employer makes towards the reitrement corpus. In this scheme, an employee contributes 12% of his basic salary every month and the employers also contribute the same amount every month. The government gives interest on the accumulated amount every month. The current rate of interest in EPF is 8.50%. Upon retirement, the employee receives a lump sum amount which turns into a handsome corpus if allowed to grow.
But, in case of emergencies, one can withdraw money from the provident fund. It is permitted to partially withdraw money from EPF to deal with an emergency.
How Much Money Is Withdrawable From EPF?
Employee Provident fund is a kind of investment scheme that aims to give a secure retirement to investors, and it works on compounding interest. Thus, experts recommend not withdrawing EPF until there is a complete emergency. And it is imperative here to note that PF drawn off within five years of account opening is taxable. Let’s check the condition for the premature withdrawal of amount:
Medical Emergencies
If there is any medical emergency in the family, either with the investor or his family members, including parents or children, one can withdraw from EPF before the set time. In this condition, the withdrawal amount would be either six times the monthly salary of the investor or lesser (the entire contribution of the employee). There is no minimum service tenure required for this withdrawal.
Wedding
The withdrawal of PF is permitted for the wedding as well. The investor could withdraw 50 per cent of his contribution along with interest. However, the condition for this withdrawal is that the investor must have contributed to EPF for seven years.
House Renovation
An investor can partially withdraw money from EPF account for home renovation. In this case, the investor could draw out 12 times their monthly salary along with interest. The condition for the same includes the investor could apply for withdrawal only after five years of home construction.
Buying Or Constructing a House
The fourth condition when premature PF withdrawal is doable is when the investor is buying a house. For this reason, the person could withdraw up to 90% of the deposited amount along with interest. The condition for this is the investor must have contributed to PF at least for five years.
Home Loan – For the repayment of a home loan also, an employee can withdraw PF partially. In this condition, 90% withdrawal is possible. The condition is that the employee must have contributed to PF for three years.
How To Withdraw Money from EPF?
Other than the benchmarks, the withdrawal amount needs approval and attestation from a gazette officer as well. The EPFO department gives the option to withdraw the amount both offline and online.
