TDS (Tax Deducted at Supply) is relevant on pre-mature EPF (Staff Provident Fund) withdrawals of Rs 50,000 or extra with efficient from June 1st, 2015. Additionally, EPF withdrawals are liable to revenue tax if withdrawn earlier than 5 years of service. You’re really allowed to withdraw (legally) provided that it has been greater than two months that you’re out of labor and your are nonetheless unemployed.
Does this imply which you could not withdraw your Provident Fund until you retire? Are there any choices to partially withdraw your EPF stability, with out getting taxed?
On this put up, allow us to study EPF Partial Withdrawals / Advances guidelines and situations, numerous choices which might be accessible to an EPF subscriber to assert partial PF withdrawals and the process to use for EPF advance / mortgage.
EPF Partial Withdrawals – Choices
Beneath are the varied causes for which you may make a partial withdrawal out of your EPF Account. These partial withdrawals are normally computed on the premise of your month-to-month wage or contributions made to this point.
- For the acquisition of Home
- In direction of the schooling and marriage bills
- For the development of Home/Flat
- To fulfill medical therapy bills
- For the reimbursement of dwelling mortgage &
- In direction of the repairs and renovation of dwelling/flat
(The definition of SALARY for EPF calculation is : Wage = Primary + Dearness Allowance. So, wage right here doesn’t imply your Take House wage. Additionally, the ‘variety of years of service’ is the entire variety of years you’ve got labored / contributed to EPF. It may be with a number of employers. The quantity of advance/withdrawal isn’t required to be refunded below regular circumstances. If the quantity isn’t utilized, the identical ought to be refunded with penal curiosity)
EPF Advance / Withdrawal for Buy of Home / Flat, Development of Home and acquisition of Web site
You’ll be able to withdraw as much as 90% of EPF Stability (Worker share and curiosity on that+Employer share and curiosity on that) or the price of the development of property whichever is much less. You’re allowed to withdraw solely as soon as in your working life from the EPF Account to fund the development, buy or reimbursement of a housing mortgage.
To avail this feature, it’s best to have accomplished 5 years 3 years of service (with efficient from 12-April-2017) to buy or construct the home. For purchasing land or web site, the withdrawal quantity might be 24 instances of your primary wage and may have accomplished 3 years of service. (Kindly be aware that as per EPFO’s workers, in case you are buying from a builder straight, then the minimal PF membership continues to be thought of as 5 years solely.)
Your amassed EPF stability have to be greater than Rs.20,000. In case your partner can also be the EPF member, then the mixed stability can be thought of for the eligibility.
Henceforth, the EPFO won’t switch the Advance quantity to EPF member (worker’s) account. The quantity can be credited to Cooperative society, Central Authorities, a State Authorities, or any Housing Company below any Housing Scheme or any promoter or builders because the case could also be, in a single or multiple installments.
If the quantity of such withdrawal is greater than the precise price or bills of buying the property, then it’s a must to refund such extra quantity to EPFO in lump sum inside 30 days from the date of allotment / completion of venture / alteration of home and many others.,
In case, you don’t make the most of the EPF advance quantity utterly for the mentioned function, it’s a must to refund the whole quantity to the EFPO account inside 15 days.
Beneath desk has all of the required particulars.
Beneath is the usual ‘Declaration Type‘ offered by the EPFO. The EPF member has to submit this kind in case the ‘partial withdrawal’ is for HOUSING functions.  There isn’t a want to surround some other paperwork like copy of Sale Deed, Constructing Sanction plan, Encumbrance Certificates and many others., The shape needs to be signed by the worker and the employer. Click on on the under picture to obtain the ‘Declaration Type Template’.  This customary declaration type can be discontinued from Feb 2017. Henceforth, there isn’t a must submit this kind (newest replace as on 22/Feb/2017)
For acquiring EPF advance for buy of home/web site, worker(s) should now submit software letter as under;
Newest Replace (22-February-2017) :
EPFO has launched new composite, single web page and customary Withdrawal type for every type of Withdrawals. This new Composite Declare Type (CCF) will now exchange all the present withdrawal Types 19, 10C & 31 (each UAN & Non-UAN primarily based). Kindly learn this newest article @Â New EPF Composite Declare Type | Single Web page Type for several types of PF Withdrawals (Full / Partial).
Withdrawals from EPF A/c for Compensation of House Mortgage
If you’re prepaying the debt (mortgage), it’s best to have accomplished no less than 10 years of service. To avail this provision, it’s worthwhile to submit Mortgage certificates / assertion to your employer, together with From 31 (type for EPF partial withdrawal),.
The withdrawal quantity that’s admissible for that reason might be least of the under;
i) 36 instances of your month-to-month wage (or)
ii) Whole contribution (or)
iii) whole excellent dwelling mortgage quantity
Now you can use your EPF stability to repay your private home mortgage EMI both totally or partly. You’ll be able to instruct the EPFO to deduct month-to-month quantity out of your PF balanced and the identical can be transferred to your Mortgage account, so long as there may be adequate EPF stability in your account. This switch can be energetic so long as you’re the member of EPF. As soon as your membership of EPF ceases, then EPFO will cease to repay the mortgage.
You should submit under authorization letter to EPFO;
EPF partial withdrawals for Medical Therapies
The EPFO permits advance withdrawals everytime you want funds for medical therapy for your self or a member of the family (partner, kids or dependent mother and father). No minimal years of service is required. Nevertheless minimal one month of hospitalization is a should.
The advance might be taken for all main surgical operations or for therapy of vital sickness. You should submit proof of hospitalization, go away certificates together with Type 31, in case the funds are in your personal therapy. (Newest Replace (28-Apr-2017) : For partial withdrawal in the direction of medical therapy, now there isn’t a must submit any medical certificates or doc. For extra particulars, kindly learn – ‘EPF advance for medical therapy‘)EPF Partial Withdrawals for Schooling or Marriage Bills
You may make a partial withdrawal for marriage of your kids, brother / sister and your self when you have accomplished seven years in service.
You may also make a partial EPF withdrawal for assembly schooling bills of your kids. Do be aware that solely ’workers contribution’ is allowed to be withdrawn.
EPF advance to an Worker who’s bodily handicapped
An worker who’s bodily challenged can apply for EPF partial withdrawal for buying any tools that may reduce the hardship on account of handicap.
Partial Withdrawal inside one yr earlier than retirement
After attaining 54 years of age and inside one yr earlier than retirement, a partial withdrawal of as much as 90% of PF quantity is allowed.
Tips on how to apply for / declare EPF partial withdrawals?
You should submit EPF Partial Withdrawal type i.e., Type no 31 together with the required paperwork / proofs to your Employer. In EPF’s Advance type no 31, it’s worthwhile to present your private, PF account, wage and checking account particulars. As soon as the declare is processed, you’ll obtain direct credit score to your checking account.Do be aware that solely after your Employer verifies your partial withdrawal software will the EPF workplace processes it.
Newest Replace (22-Feb-2017) :Â With efficient from Feb 2017, Type 31 can be changed with new EPF Composite Type. Kindly click on right here to know extra.Â
Your EPF contributions / financial savings are meant in your retirement (long-term). So, suppose twice earlier than you withdraw your PF cash. Check out all of the choices and sources to fund your bills or wants. EPF Partial Withdrawals ought to be your final resort.
Newest Replace (26-March-2020) : EPFO members can now withdraw as much as 75% of the PF balances restricted to 3 months wages as non refundable advance.
Newest Information : Now you can submit PF new declare types on to EPFO workplace with out your Employer’s attestation. Obtain New Composite Declare Type. Click on right here for full particulars.
Newest replace (22-June-2017) : EPFO (Staff Provident Fund Org) & HUDCO (Housing & City Growth Corp) plan to tie up for offering housing subsidy to members of EPF Scheme, below Pradhan Mantri Awas Yojana. As per the current notification, EPFO now permits its subscribers  who wish to purchase a home property from Housing Societies / Companies to withdraw as much as 90% of their EPF accumulations to purchase properties.
Newest Replace (27-June-2018) : EPF Subscribers who resign from their service can now withdraw 75% of their whole Provident Fund (PF) kitty after one month from the date of cessation of service. This can be thought of as a Partial PF withdrawal (Advance).
Members will proceed to have the selection of withdrawing the whole / stability quantity, in the event that they wish to shut the account, after two months , offered the member is unemployed and/or don’t make any contemporary PF contributions.
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At the moment, the EPF Scheme permits Last withdrawal (full withdrawal) solely after two months from the date of cessation of employment of the members.
Proceed studying : ‘On-line EPF Declare submission : Course of Circulation & Eligibility Circumstances‘
(Supply & Reference: EPFO. Picture Credit score : rediff.com) (Submit final up to date on : 02-Oct-2023)
