New EPF Withdrawal Rules: What You Should Know Before Making A Withdrawal

If you are a salaried employee, a portion of your salary is likely being deposited into your Employee Provident Fund (EPF) account each month. While the EPF balance typically matures after retirement, there are provisions for withdrawing money in times of need.

Yes, the Employees' Provident Fund Organisation ( EPFO ) allows partial withdrawals from the EPF fund for specific reasons. However, there are limits and rules governing how much can be withdrawn. Recently, the EPFO has revised its withdrawal rules for 2024. Here's everything you need to know before making a withdrawal.

New EPF Withdrawal Rules for 2024:

1. Online Application for Partial Withdrawal :

For partial withdrawals, EPF members are required to submit their application online. Withdrawals are only permitted for certain purposes such as education, home purchase or construction, marriage, and medical treatment.

2. 90% Withdrawal Before Retirement:

According to the updated EPF withdrawal rules, members can withdraw up to 90% of their EPF balance one year before retirement. To qualify for this, the member must be at least 54 years old.

3. Unemployment-Related Withdrawals:

In the case of job retrenchment, the EPF holder can access their funds. If an employee loses their job before retirement, they are eligible to withdraw 75% of their EPF balance after one month of unemployment. Full withdrawal is allowed if unemployment continues for two months. When the employee secures a new job, the remaining 25% can be transferred to the new EPF account.

4. Tax Benefits and TDS:

Employees who contribute to EPF for at least five years are eligible for tax benefits when they withdraw funds. If money is withdrawn before the account matures, Tax Deducted at Source (TDS) applies. However, no TDS is levied on withdrawals of less than Rs 50,000.

• If the member has submitted a PAN card, a 10% TDS will be deducted.
• If no PAN card is provided, the TDS rate increases to 30%.

How to Apply for Partial Withdrawal:

To apply for a partial withdrawal, members can visit the EPF portal or use the Umang app. Once the employer approves the request, the funds will be transferred directly to the member’s bank account. Members can also track the status of their withdrawal request online after submitting the application.