The Eligibility and Contribution Rules for Provident Fund (EPF) apply to every employee who has been working in any establishment or establishment-cum-business. Under these rules, the employees can participate in EPF Scheme from their first day of employment and receive a monthly benefit from the employer.
Some EPF withdrawal rules for beginners
In case you have not withdrawn your EPF before, here are some of the withdrawal rules that will help you make a decision:
- If you are an employee making contributions for less than 5 years or 10 years and want to withdraw the amount from your EPF account, then the minimum amount that can be withdrawn is 75% of the accumulated balance or 3 months’ basic wage plus DA, whichever is lower.
- If you are an employee making contributions for more than 10 years or 20 years and want to withdraw their PF amounts from their accounts in any year between 1st April 2020 and 31st March 2021 (or till 31st March 2022), they will have to satisfy all these conditions: * They must have made at least one contribution during last five financial years; if not then it’s considered as first five financial years only; * The minimum annual interest rate on deposits made into their PF/EPF account should not be less than 8%.
If the interest rate is less than 8%, then your PF/EPF account will be treated as inactive. * They must have earned an annual income of at least Rs. 5 lakhs in the financial year immediately preceding the withdrawal year.
The remaining 25% must be retained in the EPF account till age 58, according to EPFO
The employee should have been employed for at least 10 years and contribute to their respective accounts for at least three years before they can withdraw the amount.
If you are an employee with less than 10 years of service or if you have contributed less than ₹15,000 during your tenure as an employee then your withdrawal would be limited to 50% of your accumulated balance.
The remaining 50% will be given to you in your EPF account when you reach the age of 58. However, if your account balance is less than ₹15,000 and you have contributed for more than three years then it will be possible to withdraw 100%.
Employees with less than 10 years of contribution are required to maintain a minimum balance of ₹250 in their account
Now, those who have contributed for less than 10 years will be required to maintain a minimum balance of ₹250 in their account. The same is true for those who made contributions for more than 10 years and now have less than 10 years left to go until retirement.
The total amount withdrawn from PF accounts can’t exceed the total balance maintained by the employee in his or her PF account.
Minimum balance required for contributions
The minimum balance required for those who made contributions for 10 years and more was increased from ₹ 6,500 to ₹10,000. The minimum balance required for those who made contributions for less than 10 years is ₹250.
The EPFO has also announced new withdrawal rules that will come into effect on 1st July 2022:
- Employees can withdraw 75% of the accumulated balance or 3 months’ basic wage plus DA (whichever is lower) as per their choice within three months from the date of payment in case they do not want to invest in any other investment scheme offered by the EPFO.
- Members have been given an option whether or not they want their money invested in an insurance scheme instead after retirement; this decision should be taken within six months from when one’s account gets opened without being influenced by any third party such as a financial planner etcetera
A subscriber can withdraw once his subscription has reached five years or more
If you are not satisfied with your pension scheme, you can also withdraw if you have less than five years of service. The condition to be met is that the subscriber must have started receiving benefits and contributions at least after one year from the date of joining the retirement fund scheme.
The subscriber must have completed at least five years of service. The subscriber can withdraw his money if he has less than five years of service and has not yet started receiving benefits from the pension scheme.
In case the employee has less than 5 years of service in the EPF Account, no PF or Pension amount is payable to him/ her. But he/ she will get an option to draw/transfer 20% of the total amount available in his/her provident fund account or withdraw the full amount by closing the account.
EPF Withdrawal Rules 2022
- Employees can make withdrawals from their Provident Fund Accounts only after completing 5 years of continuous service with their employers and not more than 25 years as of the last day of 01 April 2018 (if any).
Situation you can make a valid withdrawal from your EPF account
While the government has made it clear that you can withdraw money from your EPF account, there are some situations where you can’t. You will have to meet certain conditions and requirements before you are eligible for a withdrawal.
- For example, if your wife is pregnant then she cannot withdraw any amount from her EPF account until after she gives birth and takes care of the child for 6 months (or until he/she turns 18 years old).
- If someone dies their family members cannot get any money from this account either because only the person who passed away owns it and not his/her relatives or heirs at all!
The EPF withdrawal rules are also applicable to those employees who have left the organization and are still covered under the PF scheme. The benefit of this withdrawal is that it is allowed before retirement, which means you can take out a certain amount each month from your EPF account to meet your basic needs.
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PF or EPF Withdrawal Rules 2022 FAQs
20% of your entire PF balance is the maximum amount that can be taken from your EPF account. In contrast, if you have a long history with a company, you are permitted to withdraw up to 40% of your total PF amount.
Before making an advance payment from your EPF account, you must submit your PAN information. If you don’t do this, the bank will refuse the payment and you won’t be able to make any online withdrawals from your EPF account.