75% of EPF can be withdrawn just after a month of unemployment

POSTED BY Vandana Manwani ON January 8, 2019 COMMENTS (36)

EPF is a long term retirement saving scheme. Therefore, it can be withdrawn fully(100%) only after retirement. And early retirement is not considered until the person reaches 55 years of age. However, if you get unemployed for a period of not less than 2 months, then as per old rule of section 69(2) of EPF act, you can withdraw 100% of EPF balance outstanding in your account.

Now, EPFO has made the provident fund withdrawal rules more flexible for cases of job loss and inserted a new rule under section 68HH.

EPF withdrawal rules old v/s new comparison

A new clause, 68HH has been inserted after para 68H in the 1952 EPF act

As per this, If a person has been unemployed for a period of not less 1 month can withdraw upto 75% of EPF balance outstanding in his account as on date. The section says that, even after such withdrawal is made, the person shall remain part of the EPF and eligible for pension benefits. However, the advance cannot be remitted back into the EPF i.e. it will be non-refundable.

In addition to this, the circular clearly states that para 69(2) (old rule) is still continuing. That means, after two months of continuous unemployment, 100% of EPF withdrawal is allowed. However, the waiting period of 2 months does not apply in cases of woman retiring from services for the purpose of getting married. The snapshot of circular is given below,

snapshot of circular of section 68HH of EPF

Do you think this small change in the rule of EFP withdrawal, would be beneficial on a larger scale?? Let us know your views in the comment section.

 

36 replies on this article “75% of EPF can be withdrawn just after a month of unemployment”

  1. Saket says:

    Hi,
    I was working in India for 6 years and contributed to EPF. I traveled to USA on Work Visa 2 years back
    What will happen to my EPF Account if I stay in USA for few more years and should I withdraw it?

    Thanks!

    1. Vandana Manwani says:

      Hi Saket

      Thanks for your comment.
      Your EPF balance will be growing at the rate of interest provided. I would suggest let it be as it is and use it after your retirement. And as you are not unemployed so if you withdraw it you be liable for penalty.

      Vandana

  2. Palak Sethi says:

    Hi, is it a good idea to withdraw your EPF and deposit the amount in PPF if I plan to leave job now.

    Thanks!

    1. Vandana Manwani says:

      Thanks for your comment Palak Sethi .. Please keep sharing your views like this..

      Vandana

  3. Saket says:

    Hi,
    There are 2 components in EPF 1. Provident Fund 2. Pension Fund. What happens to Pension Fund if we withdraw EPF?
    Thanks!

    1. Vandana Manwani says:

      Hi Saket

      Thanks for your comment.

      The portion of pension fund will be as it is. You can withdraw from pension fund only after retirement.

      Vandana

      1. Saket says:

        Thank you for your reply.

        Will it be a taxable income (Provident Fund) for that financial year?

        Thanks!

        1. Vandana Manwani says:

          Hi Saket

          Withdrawal from recognized EPF is not exempt.

          Vandana

  4. Vasanth says:

    Will this be applicable to Employee portion of EPF or both Employee and Employer portion?

    1. Vandana Manwani says:

      Hi Vasanth

      Thanks for your comment.

      It is applicable to both employee and employer portion.

      Vandana

  5. Ashish A H says:

    Yes, change is beneficial.

    1. Vandana Manwani says:

      Thanks for your comment Ashish A H .. Please keep sharing your views like this..

      Manish

  6. Hirdesh says:

    It may be great help during this period but wise decision is also important.

    1. Vandana Manwani says:

      Hey Hirdesh

      Glad to know that you liked the article.

      Please share it on your social media profile so that it can reach more and more people !

      Manish

  7. Jyothi says:

    I assume even after partial withdrawal after one month, the remaining balance will continue to earn interest. So employee can plan for both his short term and long term needs

    1. Vandana Manwani says:

      Thanks for your comment Jyothi .. Please keep sharing your views like this..

      Vandana

  8. Boom says:

    Hello Vandana,

    Is this amount taxable, if withdrawn post 2 months of unemployment

    1. Vandana Manwani says:

      Hi Boom

      Thanks for your comment.

      No EPF withdrawal will not be taxable.

      Vandana

  9. Bhushan Dattatray Sali says:

    Like

  10. Mahesh says:

    what about full EPS withdrawn if overall EPS tenure is above 10 year.? Any change in rule for same?

    -Mahesh

    1. Vandana Manwani says:

      Hi Mahesh

      Thanks for your comment.

      The rule is same for all irrespective of the tenure of service.

      Vandana

  11. Mahesh says:

    what about full EPS withdrawn? If overall EPS tenure is above 10 year….Is there any rule change for same? Thanks in advance.

    -Mahesh

    1. Vandana Manwani says:

      Hi Mahesh

      Thanks for your comment.

      The withdrawal rule is same irrespective of the tenure of service.

      Vandana

  12. ashish gupta says:

    This change is good. Many employees can take benefit out of this.

    1. Vandana Manwani says:

      Thanks for your comment ashish gupta .. Please keep sharing your views like this..

      Vandana

  13. Sri says:

    Withdrawal from PF is not good till retirement.As this is a long term commitment. Hence even if there is a concession given by EPFO on withdrawal, it’s always best to keep adding in this account. Yes if there is nothing else possible then it’s a personal choice.

    1. Vandana Manwani says:

      Thanks for your comment Sri .. Please keep sharing your views like this..

      Vandana

  14. Good decision. People are still unaware about the procedures to withdraw PF. Please share the same in next blog.

    1. Vandana Manwani says:

      Hi Swapnil,

      Thanks a lot for suggestion. Will take it into consideration.

      Vandana

  15. Vasundhara says:

    Will that 75% withdrawal is taxable?

    1. Vandana Manwani says:

      Hi Vasundhara

      Thanks for your comment.
      The withdrawal from recognised EPF is exempt. So, its not taxable.

      Thanks

      Vandana

  16. RAJESH BAJAJ says:

    It is certainly a welcome initiative that will benefit the needy instantly.

    1. Vandana Manwani says:

      Thanks for your comment RAJESH BAJAJ .. Please keep sharing your views like this..

      Vandana

  17. Jeffry says:

    This change is for good. Mostly on sudden job loss, folks will get a month or two severance. Once this is exhausted and no new jobs in hand, this rule will definitely help to start afresh.

    1. Vandana Manwani says:

      Thanks for your comment Jeffry .. Please keep sharing your views like this..

      Manish

      1. p s thomas says:

        thank you for conveying theinformation adv p s thomas

Comments are closed.

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