Employees’ Provident Fund Organization or EPFO, the nodal agency that monitors the Employees’ Provident Fund (EPF) contributions, allows the subscriber to make a partial withdrawal or 'advance' from the PF corpus under certain circumstances. Financial advisors say that it is not advisable to withdraw PF amount till retirement. However, subscribers may do so in order to meet their short-term needs.
Here’s all you need to know about EPF contributions
EPF, a government-run pension scheme, is focused on salaried individuals. In EPF, a mandatory contribution is deducted from the salary of an employee. An equal amount is contributed by the employers in the EPF corpus. The amount invested in the working years in the EPF kitty along with interest is paid at the time of retirement.
EPF works on compounding and the corpus, if allowed to build up, can reap huge benefits, according to experts.
(Also read: New EPFO feature allows employees to exit fund )
Claim for partial PF withdrawal
The subscribers can put an online claim for ‘advance’ or withdrawal. The claim is then forwarded to the employer for approval. Once approved, the amount is credited to the subscriber’s account within 10 days.
Conditions under which partial withdrawal is allowed from PF corpus
Partial withdrawal or ‘advance’ is allowed from a PF corpus under certain conditions such as purchase/construction of the house, repayment of a loan, non-receipt of the wage for two months, the marriage of self/daughter/son/brother, for medical treatment of family members etc.
A subscriber can withdraw funds from PF balance for medical treatment of self, spouse, parents and children. There is no minimum service period required for this. 6 month’s basic wages and DA (Dearness Allowance ) or employees’ share with interest, whichever is least, can be withdrawn in this case.
PF 'advance' can be withdrawn in case of marriage of self/daughter/son/brother/sister. The maximum PF withdrawal limit, in this case, is 50 percent of employee's share. Subscriber should have completed a minimum of 7 years in service to avail this condition.
Up to 50 percent of employees' share of contribution to PF can be withdrawn for the education of self or children after class 10th. However, the subscriber should have completed 7 years of service for this.
Repayment of home loan
If the subscriber has completed 10 years of service, he/she can withdraw up to a maximum of 90 percent from both employee's contribution and employer contribution for repayment of home loan. However, the property should be registered in the name of the employee or spouse or jointly.
PF can also be withdrawn for house renovation. However, for this, the subscriber must have completed five years of service. Up to 12 times of the monthly wages can be withdrawn.
First Published: IST