Do you want to withdraw a partial amount from EPF (Employees Provident Fund) and are not sure if it is possible, then here is a good news for you – yes, it is possible to make a partial withdrawal from your EPF account. But before you step out to take advance, be clear on some of the rules and regulations related to the advance.
With effect from 1st June, 2015, any EPF withdrawal of Rs. 30,000 or more will attract TDS (tax deducted at source). Further, if EPF withdrawals are made before 5 years of service, then also they will attract income tax. EPF partial withdrawals will normally be calculated on the basis of contributor’s monthly salary or his contributions. Let us delve the conditions/ options related to EPF partial withdrawals.
Purchase of House
While remaining in job, you can withdraw a maximum of 36 times of your salary at the time of withdrawal from your EPF account. This option is available only once in a lifetime. The withdrawal should be used for any of the following:
- Purchase of a house/ flat
- To fund the construction of house
- For repayment of a home loan
However, in case of buying a land or site, the maximum limit of withdrawal is only 24 times of the salary. Moreover, in order to avail the offer, you should have completed at least 5 years in a job.
In case of purchase of house/ flat/ construction of house (which includes acquisition of site); purchase of site for the purpose of construction of dwelling house; purchase of dwelling house/ flat on ownership; construction of house on a site owned by member or his/her spouse or jointly by them, the member need to have completed at least 5 years of service. In this case he can withdraw up to a maximum of the following:
- 36 month’s salary (basic and DA) for purchase of house/ flat or construction of house/ flat or 24 month’s salary (basic and DA) for purchase of site; or
- A sum total of employee’s as well as employer’s share along with interest; or
- Total cost
In case of any extension/ alteration/ renovation in house which is owned by self or spouse or collectively by both, the member need to have completed at least 5 years of the completion of house. In this case, he can withdraw the minimum of the following:
- 12 month’s salary (basic + DA); or
- Employee’s share with interest; or
- Total Cost
A member is also allowed to partially withdraw from his EPF account for repayment of loan, if he has completed 10 years of his service. In this case, the member needs to submit form 31 and a loan certificate or statement to employer. The withdrawal limit in this case is minimum of the following:
- 36 times of monthly salary
- Total contribution
- Total outstanding amount of home loan
The partial withdrawal facility from EPF account is available for medical treatment of self/ family member (family member includes spouse, children or dependent parents). In this case, minimum one month of hospitalization is required and form 31 along with the admission to a hospital and leave certificate is also required.
If the withdrawal is for self treatment or for family, then you can withdraw a minimum of the following: 6 month’s salary or employee’s share inclusive of interest.
Education or Marriage Expenses
If you have completed 7 years in a job, then you can partially withdraw from your EPF account or for the marriage of your children/ siblings or for yourself. For education, withdrawal is possible for self or for children. In case of education and marriage, withdrawal is allowed to the extent of 50% employee’s contribution only. Such withdrawal is possible thrice in lifetime.
Employee who is physically handicapped
If an employee is physically handicapped, then he is allowed to make a partial withdrawal from his EPF account for the purchase of equipment that can help him in reducing his hardship. He can withdraw up to 6 month’s salary or employee share with interest or cost of equipment, whichever is least.
Within one year before retirement
A person is allowed to withdraw 90% of his PF amount if he has attained the age of 54 years less than one year has passed from the date of his retirement.