Conditions under which you can prematurely withdraw from EPF account

Note that the interest earned and withdrawals are not taxed.

Investors are suggested not to make withdrawals from their Employees’ Provident Fund (EPF) until maturity as it works on compounding and the corpus if allowed to build up, can reap huge benefits. Usually, partial withdrawals or advances from PF are allowed but only under certain conditions.

Experts say EPF is a type of investment scheme that is created for retirement, hence, withdrawals should be prevented unless it is an absolute emergency. Also, note that provident fund that is withdrawn within 5 years of account opening is taxable

To meet short-term needs, partial early withdrawal from EPF is permitted on certain conditions but to withdraw the full corpus, the subscriber must be at least 58-year old. Also, one can withdraw up to 90 per cent of one’s corpus, at the age of 54 years, 1 year before retirement. After leaving a job, one can withdraw 75 per cent of their provident fund balance if he/she remains unemployed for 1 month and the remaining 25 per cent after the 2nd month of unemployment.

Partial withdrawals are allowed for financial goals like wedding planning, education, house construction, and medical issue. Note that the interest earned and withdrawals are not taxed.

When can you make a premature withdrawal from your EPF account?

Medical Emergency
In any case of medical emergency be it for the investor, spouse, parents or children, any PF member can make a pre-mature withdrawal. Either six times the investor’s monthly salary or a lesser one of the employee’s share plus interest.

New House
In case of construction or purchase of a new house, one can make a partial withdrawal from their EPF, however, the employee must have served a minimum of 5 years. In this case, one can withdraw 90 per cent of the PF Balance.

Renovation of House
The employee can withdraw after 5 years from the construction of a house, for renovation from their PF money. 12 times the employee’s monthly salary can be withdrawn in this case.

Home Loan
For repayment of a home loan, one can make withdrawals from EPF but the employee must have served a minimum of 3 years. They can make a withdrawal of 90 per cent of the PF Balance for this situation.

Wedding
For the wedding purpose, be it the member or sibling or of children, one can make a partial withdrawal from PF. However, the employee must have served a minimum of 7 years. 50 per cent of the employee’s share along with interest can be withdrawn for this case.