Employees’ Provident Fund (EPF) is an important means of financial security after retirement for employed people. In this, the contributions of both the employee and the employer are deposited, on which interest is also received every year. In recent times, amid the discussion about EPFO 3.0 and digital services, many employees have a question in their minds whether they can withdraw 100 percent of the amount from their PF account whenever they want. The answer to this is ‘no’. According to EPFO rules, it is not allowed to withdraw the entire amount during the job. 100% withdrawal can be made only under certain circumstances.
Under what circumstances can the entire PF be withdrawn?
As per the existing rules, any employee can withdraw the entire amount deposited in his EPF account after completing the age of 58 years. Apart from this, if a person becomes unemployed after leaving the job, he still gets the facility to withdraw the entire amount.
According to EPFO rules, an employee can withdraw up to 75 percent of his EPF balance one month after leaving the job. If a new job is not found for two months or more, the remaining 25 percent amount can also be withdrawn. This system has been created with the aim of providing financial assistance during unemployment.
It is not right to withdraw PF after changing job.
Many employees withdraw their old PF after getting a new job, but EPFO does not advise this. The organization says that on changing jobs, the PF amount should be transferred to the account of the new employer through Universal Account Number (UAN).
Due to this, interest continues to be earned on the PF account, the service period remains continuous and a large fund is prepared at the time of retirement. Repeated withdrawal of PF can affect future savings and in some cases you may also have to pay tax.
Partial withdrawal facility if needed
Although withdrawal of the entire amount is not allowed during employment, EPFO allows partial withdrawal for some special needs. Members can withdraw money from PF up to the prescribed limit for needs like higher education, marriage, buying a house, constructing a house, repaying home loan and medical treatment. Eligibility and withdrawal amount have been decided separately for each purpose.
Think carefully before withdrawing the entire amount
Experts believe that EPF is not just a savings but a long-term retirement plan. In this, along with the employee’s contribution, the employer’s share and annual interest is also added. Therefore, if the money is not needed immediately, it is better to leave it in the account instead of withdrawing the entire PF amount. With this, financial security remains strong in the future and adequate funds are available at the time of retirement.
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