The Employees' Provident Fund (EPF), a government-owned pension plan managed by the Employees' Provident Fund Organization (EPFO), enables the members/holders under certain conditions, to make only partial withdrawals from the PF pool. The holder must be at least 58 years of age in order to withdraw 100 per cent of the corpus. Even, one can withdraw up to 90 per cent of his or her corpus at the age of 57 years. The PF amount is compensated as a lump sum at the time of retirement or after the maturity period. A contributor must then manage the withdrawals in the proper manner to get monthly income before his/her lifespan is reached.
Studies recommend withdrawing the PF amount before retirement should not be made. The subscribers can, though, do so in an attempt to fulfill short-term requirements. For financial objectives such as education, wedding scheduling, housing development, and any sort of medical condition, partial withdrawals are permitted. However, note that the interest gained and withdrawals are not taxed. Only under certain circumstances partial withdrawals or advances from PF is permitted. Remember that, though, that EPF functions on compounding and, if permitted to grow the corpus can yield tremendous gains.
Fact 1: You can withdraw money for the medical care of yourself, spouse, family, or children from your PF corpus. The contributor can withdraw a basic wage of 6 months plus Dearness Allowance (DA) or interest payments of employees, whichever is low. Therefore, for medical care, you can withdraw up to 6 times of your salary. There is also no minimum duration of employment needed for the same.
Fact 2: A PF withdrawal can be made in the case of self-marriage or child or brother or sister. An overall PF withdrawal of 50 per cent of the employee's portion can be made. Remember that to reap from this condition, subscribers will have to achieve a minimum of 7 years of employment.
Fact 3: For educational causes up to 50 per cent of the pledge of employees towards the education of themselves or children after Matriculation examination can be withdrawn. For this, a subscriber will have to finish 7 years of operation Therefore, for marriage or education, up to 50 percent of the contributions rendered can be withdrawn 3 times.
Fact 4: For home loan reimbursement, once the subscriber has served 10 years of employment, up to a limit of 90 percent can be withdrawn from both the contribution of the employer and employee. Please remember that the property needs to be registered on behalf of or jointly with the employee or spouse. Therefore, for the reimbursement of a home loan, it is possible to withdraw up to 36 times the subscriber's wage.
Fact 5: Similarly, PF can also be withdrawn for a house reconstruction, for which the subscriber will have to undergo 5 years of employment. Therefore, a subscriber can withdraw up to 12 times his/her salary for upgrading and renovating his/her house, and the contributor can withdraw up to 24 times his/her salary for the acquisition of a site or land estate.