When can you prematurely withdraw from EPF?

Financial planners suggest that you should not withdraw from your Employees' Provident Fund (EPF); the amount accumulated should be seen as savings for retirement. Many dip into the EPF corpus to meet short-term needs. Recent changes in withdrawal rules have perhaps made matters easier. Partial early withdrawal from EPF is now permitted for a child’s marriage, higher education and making a down payment for a house, subject to conditions.

Members are also allowed to withdraw the entire amount if they remain unemployed for more than two months. So, if at all there is an emergency and you need the funds, here is all you need to know about the specific conditions when you can withdraw from your PF.

Reason: Marriage

Limit: Up to 50% of employee’s share of contribution to EPF
No of years of service criteria: 7 years
Other conditions: For the marriage of self, son/daughter, brother/sister

Reason: Education
Limit: Up to 50% of employee’s share of contribution to EPF
No of years of service criteria: 7 years
Other conditions: For the education of either himself or his children after class 10

Reason: Purchase of land /purchase or construction of a house
Limit:
For land: Up to 24 times of monthly wages plus dearness allowance
For house: Up to 36 times of monthly wages plus dearness allowance
No of years of service criteria: 5 years
Other conditions: The asset, land or house, should be in the name of the employee or spouse or held jointly

Reason: Home loan repayment
Limit: Up to a maximum of 90%, from both employee’s contribution and employer contribution in Employee Provident Fund.
No of years of service criteria: 10 years
Other conditions:
i. The property should be registered in the name of the employee or spouse or jointly
ii. Withdrawal permitted subject to furnishing of requisite documents as called for by the EPFO relating to the housing loan availed
iii. The accumulation in the member’s PF account (or together with the spouse), including the interest, has to be more than Rs 20,000

Reason: House renovation
Limit: Up to 12 times of the monthly wages
No of years of service criteria: 5 years
Other conditions: The property should be registered in the name of the employee or spouse or jointly

Reason: Medical emergency
Limit: 6 months’ basic wages and DA or the employee share with interest, whichever is least
No of years of service criteria: NA
Other conditions: For self or family member’s treatment (certificate must be signed by doctor and employer)

Reason: Job loss
Limit: Up to 75% of total corpus if unemployed for 1 month; balance if unemployed up to 2 months
No of years of service criteria: NA
Other conditions: NA

Reason: A little before retirement
Limit: Up to 90% of total corpus
No of years of service criteria: Once one is 57 years old
Other conditions: NA


Source: Cleartax