After the retirement, the Employee Provident Fund helps to secure financial security in the future. However, this facility is meant only for those who are working in the organized sector. But, the government has allowed the PF account holder can withdraw some part from this fund even before retirement especially on the occasion of some important expenses.
The Employees Provident Fund Organization (EPFO) allows withdrawal of some part of this fund for marriage, education, medical emergency, home loan repair, house purchase or renovation before retirement. It is important to know some rules related to this before making a claim.
What is the rule for home loan repair?
If you want to withdraw any amount from your EPF for Home Loan Repayment, then you must be in service for at least 10 years. There will be some terms and conditions for this withdrawal. Firstly, the home loan for which you are making this withdrawal, that home loan has been taken jointly in the name of you or spouse or both. For this withdrawal, you will have to submit the required documents to EPFO. You can withdraw at least 36 months basic salary and dearness allowance. This will also include the contribution of the employee and the employer and the interest on it.
To buy land or build a house
You can also withdraw some part of the Employee Provident Fund to buy a house or land to build a house. For this you will have to remain in service for at least 5 years. The house or land to be purchased must be jointly registered in the name of your name or spouse or both.
What is the rule for marriage and education?
You can take out some part of EPF before retirement for marriage of your brother or sister or children. You can also withdraw from this fund keeping in mind the expenses incurred for higher education of your children. This fund can be withdrawn only after the child passes 10th.
As per the EPFO rules, 50 per cent of its total contribution can be withdrawn in the name of marriage or higher education before retirement. For this, you have to keep in mind that you have been in service for at least 7 years. Meanwhile, if you have changed your job, you will still be eligible for this withdrawal. Overall, you will be allowed to withdraw from this fund only after working for at least 7 years.
Suppose there is a total contribution of 4.5 lakh rupees in your EPF, which is 5 lakh rupees along with interest. In such a situation, you can withdraw up to 2.5 lakh rupees in the name of marriage or higher education. You will be eligible for this withdrawal only 3 times till retirement.
PF extraction process
You can apply online for withdrawal from your Provident Fund. Apart from this, you can also apply through a form by going to the local EPFO office. To withdraw some part of the fund, you have to fill a self-attested form. To fill the online form, you will have to apply by visiting the official website of EPF. Your Universal Account Number (UAN) must be activated on this website. Also, it should have Aadhaar, Permanent Account Number (PAN) and bank account link.
Should PF be withdrawn before retirement?
Every month employees and employers deposit a fixed amount into this fund. Experts believe that this fund should not be withdrawn before maturity. Because, this can increase the risk after retirement. In such a situation, if you buy a house with the help of money deposited for retirement or use it for any other expense, then financially weak life after retirement.
According to experts, banks are always ready to give loans. Banks have many types of offers, especially for education or buying a house. But, no bank gives loan for planning after your retirement. In such a situation, you can secure your post-retirement life through EPF. EPF is an amount in which compounding is also provided. The special thing about this fund is that the employee does not have to worry about saving during his job.
(The Hindi version of this article was published by www.zeebiz.com)