Employee Provident Fund (EPF) is a salaried-class retirement saving plan in India. Administered by the Employees’ Provident Fund Organisation (EPFO), it makes employees and employers both contribute 12% of the salary of an employee on a monthly basis. The deposited amounts earn interest yearly, with interest for FY24-25 at 8.25%. Even though EPF aims to provide financial protection after retirement, employees may withdraw funds early in certain situations.
TYPES OF EPF WITHDRAWALS
There are three primary types of EPF withdrawals:
- Final Settlement: The entire EPF balance can be withdrawn by employees at the time of retirement or resignation.
- Partial Withdrawals: Allowed under certain circumstances like medical treatment, higher studies, marriage, or home loan repayment.
- Pension Withdrawal Benefit: Employees with a minimum of 10 years of service can avail a monthly pension when they reach 58 or 50 years (in the event of premature retirement).
EPF WITHDRAWAL RULES 2025
- Employees cannot withdraw their EPF balance while employed. They may withdraw under certain circumstances, such as over a month of unemployment.
- If unemployed for one month, employees can withdraw 75% of their EPF balance. In case of unemployment for two months, the remaining 25% is also withdrawable.
- Withdrawals of more than Rs 50,000 within five years of account opening are subject to TDS at 10% (with PAN) and 30% (without PAN).
- Employees can take loans against their PF savings after serving for a specified period.
- EPF balances may be transferred rather than withdrawn while changing jobs, on condition that the Universal Account Number (UAN) is active.
- Employees may withdraw 90% of their EPF corpus after one year of retirement if they are 54 or more years old.
COMMON EPF WITHDRAWAL REASONS
1. Unemployment
- 75% withdrawal after a month of unemployment.
- Withdrawable after two months of unemployment for 25%.
2. Medical Emergencies
- No waiting period required.
- Withdrawal limit: Interest on the employee’s share or six times the monthly basic salary, whichever is less.
3. Education
- Withdraw up to 50% of contributions for own or children’s education after seven years of service.
4. Marriage
- Employees can withdraw up to 50% of their contribution for their own or their dependents’ marriage after seven years of service.
5. Purchase of Home or Land
Five-year service employees can withdraw:
- House Purchase: 36 times the monthly basic pay along with a dearness allowance.
- Land Purchase: 24 times the monthly basic pay along with a dearness allowance.
- The property should be in the name of the employee or spouse and can be withdrawn only once.
6. Repayment of Home Loan
10 years of service is required. Withdrawal limit is the minimum of:
- 36 times the basic monthly salary along with dearness allowance.
- Employee’s and employer’s contribution to EPF corpus plus interest.
- Amount of outstanding principal and interest on the housing loan.
The property should be owned by the employee or spouse.
7. Home Renovation
Minimum five years of service. The limit of withdrawal is the minimum of:
- 12 times the monthly basic salary along with dearness allowance.
- Employee’s contribution along with interest.
- Renovation cost in total.
Employees can withdraw funds for home renovation twice: after five and ten years from home completion.
DOCUMENTS REQUIRED FOR EPF WITHDRAWAL
- Aadhaar Card linked with UAN.
- PAN Card (in order to prevent high TDS on premature withdrawals).
- Bank Account Details.
GRIEVANCE PORTAL FOR PF WITHDRAWAL
Employees with problems relating to their PF withdrawal procedure can submit grievances through the EPFiGMS (EPF I Grievance Management System) on the EPFO’s official site.
TAX IMPLICATIONS ON EPF WITHDRAWAL
Employees need to know the tax regulations concerning EPF withdrawal in order to avoid tax liability:
- Withdrawals within five years of continuous employment are subject to TDS only if the sum is more than ₹50,000.
- TDS of 10% is levied in case of furnishing PAN, while 30% is levied in case of non-availability of PAN.
- No TDS is charged if Form 15G/15H is furnished.
- Withdrawals after five years of continuous employment are not subject to TDS.
- Interest on post-retirement EPF is taxed at the marginal tax rate.
CONCLUSION
EPF is an important financial security net for Indian employees, providing both retirement security and funds during key life stages. With the convenience of partial withdrawals and the possibility of carrying forward EPF balances between jobs through UAN, employees can manage their savings in a strategic manner. The recent 2025 withdrawal regulations further fine-tune the system with improved financial accessibility without jeopardizing the stability of the scheme in the long run.