One of the most widely utilized investment schemes in India, the Employee Provident Fund or EPF has a long list of benefits for the salaried class. EPF is managed by the government, promoting savings for every professional working in the service sector.
Under EPF, an employee has to pay a respective amount towards the scheme. Plus, the employer also pays an equal amount. The interest is then paid on both the contributions.
However, one cannot find much information about EPF on the internet. While a bunch of people search, “EPF withdrawal rules”, others search “how to withdrawal pf online”. All in all, employees have a lot of questions regarding the withdrawal options under this scheme.
Keep reading to know the 5 facts about EPF withdrawal one should definitely know!
- No Certificate Required For Taking Advance From EPF
Every employee can now withdraw money from EPF by “self-declaring” for certain reasons including medical treatments, purchasing handicap equipment, and for house building or education needs, too.
Earlier, the advance was granted only when the member gave a certificate from the employer along with the necessary documentation to support the reason for advance withdrawal.
Gone are those days when an employee spent a lot of time collecting certificates and proofs. Isn’t that great!! This is a great help for about 4 crore employees. In addition to this, it speeds up the whole withdrawal process as well.
- Composite Single Page Form For Withdrawal
As mentioned earlier, EPF members no longer need to submit any evidential document to withdraw PF in advance. Lately, EPFO has introduced a composite single page form that has literally made the EPF withdrawal simpler and uncomplicated. No need to ask your friends- “how to withdrawal pf online?” Employees can easily do all types of PF withdrawals using this form at present.
- Withdrawal up to a 90 percent to Purchase a Home
Today, every EPF member can withdraw up to 90% of their savings in the PF account or the total amount to purchase or construct a property. But it was not the same earlier.
Two years back EPF members could only withdraw up to 36 months of basic salary along with dearness allowance to purchase or construction and 24 months of basic salary with dearness allowance to purchase land.
In addition to this, an individual who is an EPF organization member for 3 years can also withdraw money to purchase a home. But earlier, one required 5 years of membership in the EPF organization to withdraw the money.
- Tax on EPF Withdrawals
Tax on EPF; this is one of the common concerns of every employee.
Most people believe that EPF withdrawals are not taxable, however, it is not true. EPF withdrawal can be taxable. And in certain cases, TDS is deducted as well.
EPF balance is taxable when an individual withdraws the EPF before finishing five years of service.
- EPF Withdrawal Before Retirement
Employees can withdraw the EPF balance if they leave their job and remain unemployed for two/more months. However, one cannot get these financial benefits means they will not withdraw the full amount until retirement. Plus, the employer contribution, as well as the interest earned on EPF, cannot be withdrawn till the retirement as well. One can only withdraw their part of contribution and the interest earned on it.
No more searching- “how to withdrawal pf online”- I saved your time!!
I hope there is no more doubt left in your mind regarding the EPF withdrawal!