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[How to ] withdraw PF early during employment (pre-mature withdrawal) ?

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Money in your PF account should be kept for your retirement purpose.

However, do you know that you can withdraw amount from your EPF account during the employment in case of certain emergencies? If you meet certain conditions, EPFO can sanction the pre-mature withdrawal.

In this post, I am trying to explain the situations where you can withdraw PF amount early during the employment.

Pre-mature PF withdrawal is allowed for specific purposes and if the individual furnish all relevant documents and satisfy the necessary requirements:

1)  Two months without any job

An employee can withdraw his/her entire EPF contributions 2 months after leaving a job. However, there is a condition that the employee shouldn’t start working elsewhere in that period. If another job is taken up within two months, the EPF balance must be transferred to the worker’s new PF account at his/her new workplace.

2)    Education or marriage

  • a.    The employee should have completed at least seven years of employment or service.
  • b.    Withdrawal allowed for self, siblings or children’s marriage.
  • c.    Withdrawal permitted for self or children’s education only.
  • d.    Proof of the education or wedding required to be submitted, such as a valid copy or a bonafide certificate of the payable fees, or the wedding invitation.
  • e.    In case of education, the individual needs to apply using Form 31 through his/her employer.

How much can you withdraw – 50 % of the total corpus amount till date

Permitted thrice during a person’s total service tenure

3)    Medical treatment

  • a.    Withdrawal permitted for medical treatment of self, spouse, parents and children.
  • b.    There is no restriction regarding the number of years of service.
  • c.    The proof of hospitalization for a month or more along with an approved leave certificate from the employer for the corresponding period needs to be produced.
  • d.    The member needs to obtain and deposit a certificate from the employer or ESI stating that ESI facility is not accessible or available to him/her.
  • e.    A certified proof or document of the disease should be submitted in Form 31 while applying for withdrawal.

How much can you withdraw – 6 times the monthly salary of an individual or the total corpus amount, whichever is lesser

No limit on number of withdrawals.

4)    Purchase of a plot

  • a.    Should have completed at least five years of service.
  • b.    The plot or property should be registered in the person’s or his/her spouse’s name or should be owned jointly.
  • c.    The plot should not be entangled in any legal issues, and the agreement registered under the Indian Registration Act with the flat promoter needs to be submitted along with the application form.

How much can you withdraw – Up to 24 times the monthly salary of the individual.  Permitted – Once during entire service tenure

5)    Construction or purchase of a flat or house

  • a.    Should have completed at least five years of service.
  • b.    The house should be registered in the person’s or his/her spouse’s name or should be owned jointly.

How much can you withdraw – Up to 36 times the monthly salary of the individual. Permitted – Once during entire service tenure

6)    Repayment of home loan

  • a.    Should have completed at least 10 years of employment.
  • b.    The house should be registered in the person’s or his/her spouse’s name or should be owned jointly.

How much can you withdraw – Up to 36 times the monthly salary of the individual.  Permitted – Once during entire service tenure

7)    Alteration or renovation of house

  • a.    Should have completed at least five years of service.
  • b.    The house should be registered in the person’s or his/her spouse’s name or should be owned jointly

How much can you withdraw – Up to 12 times the monthly salary of the individual. Permitted – Once during entire service tenure

8)    Pre-retirement

  • The individual must be at least 54 years old.
  • How much can you withdraw –  90 % of the total corpus amount
  • Once during entire service tenure

Process to withdraw PF Amount early –

You need to submit Form 31 for claiming amount. Download the Form from EPFO website 
http://www.epfindia.gov.in/downloads_forms.html

But the PF authorities will sanction only if you satisfy the qualifying conditions. 

If you have any queries related to this article or any other personal finance query ( Investment, Taxation etc), please comment below

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About wealth18

The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

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