EPF is a compulsory pension scheme for professionals in private and public sector companies with more than 20 employees. It is part of the Employees Mutual Aid Fund and Miscellaneous Provisions Act, 1952, and is administered by the Employees Mutual Aid Fund Organisation (EPFO).
The amount required after retirement depends on an individual’s lifestyle, fixed commitments, and health status. Employees Mutual Aid Fund (EPF) plays an important role at the time of retirement. The funds in the mutual aid fund can be used to purchase an annuity or can be taken as a lump sum when an employee retires.
Let’s understand the EPF withdrawal process in detail.
Who is eligible to withdraw contributions from EPF?
12% of an employee’s material allowance and basic salary goes towards EPF, which is matched by the employer. Employees generally withdraw their contributions after retirement, but the option to withdraw remains available in case of emergency. But are employees eligible to withdraw the contributions they should meet?
The eligibility criteria for withdrawing EPF are as follows:
Up to one year before retirement, an employee can withdraw 90% of his/her contributions.
After one month of unemployment, an employee can withdraw 75% of his/her contributions and the remaining contributions will be transferred to the new EPF post where he/she is re-employed.
The employee must have a valid UAN and his/her bank account details including AADHAR and PAN should be linked to the UAN.
Documents required to withdraw EPF
The following documents need to be submitted to withdraw EPF:
- Attested copies of the applicant’s KYC documents. It can be any of the following – Aadhar Card, Voter ID, Passport, or Driving License.
- Cancelled cheque or updated bank passbook or any other document that can be used to verify the applicant’s bank account details.
- If an employee withdraws EPF with less than five years of continuous employment, ITR Form 2 and ITR Form 3 are required.
- Bank Account Statement
- Revenue Stamps if you choose to receive the amount in your bank account.
- A duly filled EPF claim form.
When can EPF be withdrawn?
Employees cannot withdraw their EPF contributions whenever they like. There are certain circumstances under which EPF withdrawal is permitted.
| Conditions Allowed for EPF Withdrawal | Tenure of the Employee’s Service | Limitations (If Any) |
|---|---|---|
| Buying or construction of a house | Continuous service of 5 years | Only the PF account holder or their spouse can apply for withdrawal. |
| Medical emergency | – | PF account holder, their parents, spouse or children can apply. |
| Repayment of home loan | Continuous service of 3 years | Only the PF account holder or their spouse can apply. |
| Home renovation | Continuous service of 5 years from the date of completion of the construction | Only the PF account holder or their spouse can apply. |
| Wedding | Continuous service of 7 years | Only the PF account holder, their siblings, and/or their children can apply for withdrawal. |
What are the EPF withdrawal limits?
If you decide to withdraw from your EPF account before retirement, there are certain limitations. You can withdraw a portion of your EPF in case of certain emergency situations. You can withdraw the entire amount only after retirement.
| Situations when you can Withdraw EPF | EPF Withdrawal Limit |
|---|---|
| Medical Emergency | 6 times the current monthly salary, or total corpus – whichever is lower |
| Wedding | 50% of the total EPF contributed till date |
| Repayment of Home Loan | Up to 90% of the EPF contribution |
| Home Renovation | 12 times the current monthly salary |
| Unemployment or Job Loss | – 75% of the EPF contribution after 1 month of unemployment
– 25% of the EPF contribution after 2 months of unemployment |
| Retirement | Total corpus |
The EPF withdrawal limits in certain circumstances are as follows:
How to Withdraw Employees Mutual Aid Fund (EPF)
Employees Mutual Aid Fund (EPF) can be withdrawn both online and offline. However, if your AADHAR is linked to your UAN, you can only opt for the online withdrawal mode of EPF.
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