Contributions to Employee Provident Fund are deposited in to employee’s EPF account every month. Both employee’s and employer’s contributions are deposited and interest on such deposit is credited to the Employee Provident Fund account.
Unlike in PPF account, employees do not deposit anything to the Employee Provident Fund account directly. Employers deposit both portions on behalf of the employee. Objective of having an EPF account is to build a corpus amount that helps to build financial stability post retirement.
However in urgent cash requirements like marriage, building a house and in some other situations employee have option to withdraw balance in Employee Provident Fund account.
Let us discuss when balance laying in EPF account can be withdrawn;
Withdrawal from Employee Provident Fund for Education or Marriage
After completing 7 years of service or employment, an employee will be eligible for withdrawing balance amount in Employee Provident Fund account.
In case of employee’s marriage or marriage of sibling or children, the person can also withdraw the EPF balance from his or her account. However, in the case of education, withdrawal is permitted only for the education of employee and his children.
While applying for withdrawal from EPF account, employee is required to submit proof of marriage like wedding invitation or fees to be payable for education. On submission of a valid proof, employee can withdraw only 50% of the total amount laying in EPF account.
Such withdrawal for marriage and education can be done only 3 times during the employee’s entire service tenure.
EPF withdrawal for Medical treatment
Money from Employee Provident Fund pr EPF account can be withdrawn in case the employee have any medical emergency for treatment of self, spouse, children and parents.
Unlike, in the case of education and marriage there is no restriction on tenure of employee’s service or employment.
You can withdraw EPF balance if the person has newly joined the service.
While applying for withdrawal, you are required submit proof of hospitalization and certified copy of the disease to employer. In addition to these documents employer has to provide a certificate stating that ESI facility is not available to the employee.
In these circumstances one can withdraw six times of the salary or amount in EPF account which ever is less.
EPF withdrawal for Purchase of a Plot / Purchase or construction of House or Flat / Other house related purpose
One can even buy a house by withdrawing money from EPF Account. To do that you need to complete 5 years of service or employment.
For the purpose of a house or flat, you can only withdraw once in your entire service time. In case of purchasing a plot, you can withdraw up to 24 times of your salary from your Employee Provident Fund account subject to the balance amount is laying in your account.
However, to purchase or construct a house or flat you can withdraw up to 36 times of your salary from your Employee Provident Fund account.
While applying for withdrawal, you need to submit the proof towards purchase of house or flat like the agreement that you entered with the promoters.
To avail such benefits, the property should be registered in the name of employee or spouse. House can also be owned jointly in the name of husband and wife to withdraw money from Employee Provident Fund account.
One can use EPF account towards repayment of home loan if he or she has completed 10 years of service or employment. For repayment of loan you can withdraw 36 times of your salary and it can be done once in your entire service tenure.
Similarly, you can withdraw for renovation or alteration of your house but in this case you can withdraw only up to 12 times of your salary.
While leaving a company it is not possible to withdraw Employee Provident Fund balance unless you are unemployed for more than 2 months.
On switching jobs from one company to another you are required to transfer the EPF money from previous Employee Provident Fund account to current one through your present employer after joining them.
Apart from all these reasons you can also withdraw 90% of your EPF balance from Employee Provident Fund account after reaching 54 years of age. However, you can withdraw only once in your entire service tenure. Form 31 has to be submitted for withdrawal of EPF balance through your employer.