EPF Withdrawal Rules 2019-Partial and Full

Everyone who works in an organization knows very well about the Employee Provident Fund (EPF). 12% of the monthly basic salary and dearness allowance is automatically deducted towards EPF from the employee’s salary. The same amount is contributed towards EPF by the employer. There’re few people who don’t know that a monthly deduction of 1250 goes towards the Employee Pension Fund (EPS). Out of the 12% from the employer’s contribution, 8.33% goes towards EPS whereas 3.67% goes towards EPF. Nonetheless, the maximum limit in EPS contribution is 1,250 per month. This was just some basic information about EPF. But do you know that you have the facility of partial and full withdrawal from EPF during times of necessities? So, what are EPF withdrawal rules in 2019? Let us discuss the same one by one so that you can easily understand.

At The Time Of Resignation

You can withdraw up to 75% of the total amount if you’ve been unemployed for more than a month. On the other hand, 100% can be withdrawn after 2 months of constant unemployment.

But if you’re planning for a job change, then you can transfer the EPF amount to the company you’d join.

Although you can withdraw the entire EPF amount even upon joining another company but it’s not legal to do so.

Now, in which scenarios can you partially withdraw the EPF amount if you’re working in an organization?

EPF Withdrawal Rules 2019 – Partial and Full

Here is the list of the EPF Withdrawal Rules – Partial And Full  For The Year 2019.

1. Medical Emergency
2. Children`s Higher Education
3. Marriage – Self/Siblings/Children
4. For Addition/Improvement/Alteration of House
5. Purchase Of House/Flat/Construction Of House Along With Acquisition Of Site
6. Partial Withdrawal Before Retirement

Also Read: EPF Vs PPF Vs FD Vs Debt Funds

Medical Emergency

An employee can withdraw the EPF amount for medical treatment of self and family during times of emergencies. There is no specific clause regarding the minimum service period required for the withdrawal of EPF in this case.

The maximum amount that can be withdrawn should be at least of the 2 below-mentioned points:

1. Six Months of basic salary and dearness allowance or
2. Employee contribution with interest

It means that you cannot withdraw the entire contribution amount if you’ve been working in an organization for 20 years.

There is no restriction on the number of withdrawals that you can make for the same purpose.

Children’s Higher Education

An employee can also withdraw the EPF amount for his son`s or daughter`s higher education needs. The conditions for the withdrawal are as follows:

1. Minimum service period of 7 years is required.
2. Maximum 50% of the employee`s share with interest can be withdrawn.
3. The amount can only be withdrawn for children`s higher education i.e. post matriculation (After 10^th )

Marriage – Self/Siblings/Children

EPF can also be withdrawn for the purpose of self, siblings (brother and sister) and children`s marriage. Again, a minimum 7-year service period is required for the same. An employee can withdraw a maximum of 50% of the employee`s share along with interest.

There’s a restriction on how many times, you can withdraw for children’s higher education and marriage of self/siblings/children. Both combined, you can make the withdrawal for a maximum of 3 times.

For Addition/Improvement/Alteration of House

The first condition for this withdrawal is that either you or your spouse should own the house individually or jointly.

The 2nd condition is that – the employee should be a member of the scheme for 5 years from completion of the house.

The withdrawal amount should be at least the following:

1. 12 Months of basic salary and DA
2. Employee share with contribution and interest
3. Cost of Addition/Improvement/Alternation

You can withdraw the amount twice. First time as mentioned above whereas the 2^nd time after 10 years from the date of the first withdrawal.

Purchase Of House/Flat/Construction Of House Along With Acquisition Of Site

An employee can withdraw the EPF amount for a house or flat purchase and construction of house including the acquisition of the site.

The withdrawal amount should be at least the following:

1. For purchase of site: 24 month’s basic salary and DA.
2. For purchase of house/flat/construction: the basic wages of 36 months and DA OR
3. Total of employee and employer share along with interest OR Total cost.

Here the employee and employer contribution can be withdrawn along with the interest.

Partial Withdrawal Before Retirement

An employee can also withdraw 90% of the PF accumulation (both employee and employer contribution) after 54 years of age. But the withdrawal must be made within one year of retirement/ superannuation, whichever is later.

This means that if you retire at age 58, you’d be able to withdraw 90% by age 57. But if you retire at age 55, you’d be able to withdraw 90% of the EPF by age 54.

There are some other partial withdrawal rules also:

1. Withdrawal from the fund for repayment of loans in some special cases.
2. Grant of Advances in special cases.

Since these are special cases, I have not given explanations for the same in the article.

Form 31 is required for partial withdrawal – EPF Govt. Rules

TDS on EPF

EPF withdrawal is taxable only if it is withdrawn before 5 years of continuous service. TDS is deducted if the withdrawal amount exceeds 50,000.

Partial withdrawal is not taxable.

So, these were the EPF withdrawal rules – partial and full withdrawal in 2019. Please don’t hesitate to get in touch and let me know if you have any queries regarding EPF withdrawal.