PF Withdrawal Rules 2022 : For Home loan, Medical Urgency, Marriage or in a Special Cases

General Rules

• The purpose of EPF is to invest some money for the retirement of the employee and hence it is suggested to avoid advance withdrawal.
• EPF withdrawal before 5 years of service is taxable which means you may experience a cut on the credited amount.
• Now you don’t need to open a new EPF account on joining a new organization as you can transfer the EPF balance to the previous account. This will save paperwork and keep your PF account active in a continuous series. But the withdrawal can’t be possible for the balance contributed by the current employer (until minimum service tenure criteria are fulfilled)

Before 5 Years of Service

• Anyone can withdraw his EPF before 5 years of service tenure, but the PF balance of Rs. 50,000 & above will get TDS deduction
• Under this PF withdrawal condition, the employee needs to present the detailed summary of the PF deposits as per the latest ITR forms 2 & 3. Your EPF deposits will comprise the employee’s share, employer’s contribution toward EPF, and the interest earned on each deposit (that may be around 8% per annum).
• After revaluation of the EPF withdrawal application, the ITO department will imply taxes (if eligible). For tax exemption, claim exemption as per Section 80-C, otherwise, no tax benefits will be attained.

After Retirement

• One must claim for final settlement after retirement. Also, one can get an additional benefit of the EPS amount if he has diligently served for more than 10 years in the current organization. He can withdraw the entire EPS amount along with the EPF balance.
• Get additional monetary reward in the form of a pension is offered to retired employees who completed their 10 years of service in the current organization.
• Withdrawal of EPF corpus is tax-free, but the interest earned on it is taxable.
• If the PF balance is not withdrawn for the next 3 years after retirement, then the interest earned on it will be taxable.

For Marriage or Higher Education

• Only 50% of the PF amount can be withdrawn for child higher education (after matriculation) or marriage of a family member who is financially dependent on you like younger siblings or children.
• The privilege of this benefit can be availed 3 times in a lifetime.
• A formal document or certificate with course details and expenditure (in case of education) or member declaration in form 31 will be required for withdrawal.

For Home Loans

• Registered EPF members can get financial support in the form of PF advance after 3 years of service. As per Para 68-BD of the EPF scheme (1952), the maximum limit of the advance amount is 90% of the corpus and can be used for the repayment of a home loan or as a down payment while taking a home loan.
• The minimum PF balance should be more than Rs. 20,000, individually or after summing the PF balance of the spouse.
• The benefits of the PF withdrawal policy for this purpose can only be attained once in a lifetime. It is also valid for houses financed through Pradhan Mantri Awas Yojana (PMAY) on subsidized costs.
• To avail home loan on EPF, one must need to fulfill the following criteria
  • Should be a member of housing society that has 10 or more members
  • Should have Commissioner’s certificate of PF contributions & composite claim form

In Special Cases

• Lockdown for more than 15 days / not receiving a salary for more than 2 months:
  • One can withdraw an employee’s contribution & interest earned on it from the PF account.
  • Need to submit a certificate Form A & B

• Dismissal of the member who is challenged by him in court:  
  • Around 50% of employee share & its interest can be withdrawn.
  • A copy of the petition & written documents from member proving the status of the case as “pending” are the documents required

For Medical Treatment

• Anyone can withdraw PF in advance for medical treatment (self/family member). The maximum limit is 6X of monthly income with DA or employee share with interest (whichever is lesser).
• Submit certificate C which is duly signed by your doctor in charge & employer for EPF withdrawal