EPF early withdrawal: Under what circumstances are you permitted to take out money?

Kolkata: EPF or Employee's Provident Fund is designed for building a corpus for use in the post-retirement life of an employee and his/her family and the EPFO (Employees Provident Fund Organisation) discourages early withdrawal from the fund. However, life is full of nasty surprises and emergencies which are unpredictable and often puts an individual in a situation where he/she needs a significant amount suddenly. It is for such exigencies that the authorities have kept provisions for withdrawing a part of the funds from the EPF account.

However, one cannot take out funds at will. EPFO rules clearly define situations and predicaments in which one can make early withdrawals. It doesn't allow any latitude from these conditions and justifiably so. It's important for an employee to know which are the situations where he/she is allowed early withdrawal from the account. Let's have a look.

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Medical emergency constitutes one of the main conditions when one is allowed early withdrawal from the EPF account. Such needs can arise any moment. An employee can withdraw 6 months basic wages + DA or employee share with interest, whichever is less. This is allowed for treatment of self, or a family member.

One can take out funds early if one has to foot the bill for wedding expenses. Tis can be done for the marriage of self or son/daughter/brother/sister of the employee. One must have completed seven years of EPF membership. One can withdraw a maximum of 50% of the employee share with interest.

One is also allowed to take out funds early for post-matriculation education of kids. The amount that one can withdraw is capped at 50% of employee share with interest.

This is one of the common causes for which employees apply to withdraw money from their EPF account. It is also applicable in case one is planning to buy a plot of land to build a house. The maximum amount that one can withdraw is basic wages and DA for 24 months OR basic wages + DA for 36 months or total of employee and employer share with interest or total cost, whichever is lower. The rules allow withdrawals for alteration/refurbishing of a house but the amount is relatively smaller -- 12 month basic wages and DA OR employee share with interest or cost of the job, whichever is the lowest.

These are special cases when one is allowed the facility of early withdrawal. One can take out basic wages for 36 months + DA or total of employee and employer share with interest, whichever is lower.

If one has to buy equipment for a family member with physical disability or for self, one can withdraw funds before retirement. The maximum amount allowed is 6 months basic wages + DA or employee share with interest or cost of equipment whichever is lower.

Jobs are very insecure nowadays and there are many instances when companies close down. The rules state that if a firm is closed for more than 15 days, an employee can take out EPF money. The maximum amount that is permitted in this situation is the full employee share with interest. But in the unfortunate case of the closure continuing for 6 months without compensation and the employee remains without a job, the full amount in the EPF account can be withdrawn.