Six Reasons for Withdrawing Money From EPF Last Updated : 20 Oct 2019

Employee Provident Fund (EPF) account holders have many reasons for withdrawing money from their EPF accounts before retirement. Some of those reasons include medical treatment, wedding, house repairs, home loan repayment, and education expenses.

Many people do not have the idea that they can actually go ahead and withdraw some cash from their EPF even if they are in a particular job. However, the reason for withdrawing some money from the EPF must be very strong. These reasons may include marriages, purchasing a house or making payments for the education.

EPF is a very important part of your salary. You may use this money when you are in a tight financial situation. In case, you have already work for 5 to 20 years already, a good amount of money must have accumulated in your EPF account. But many people think that the money will only be available to them when they make a job change or after their retirement.

The situations under which you can go ahead and withdraw money from your EPF while you are still working
  1. Medical Treatment
  2. Marriage purposes
  3. Construction of house or purchase of property
  4. Repaying the existing home loan
  5. Education purposes
  6. Alterations or repairs for your house

1. Medical Treatment

In case you are covered by a health insurance policy, then you are all good. But, if you do not have one and in that situation you need to be hospitalised, you might be shelling out a huge amount of your hard earned money. However, in a time like that, your money in the EPF can really help you out. You may withdraw money from your EPF account for any of the three reasons provided below. However, please, do keep this in mind that can choose only one situation and not all of them.

  • Any major surgery in a particular hospital
  • The hospitalisation period is more than a month
  • The individual is suffering from Tuberculosis, Leprosy, Cancer, Mental Derangement, Paralysis, heart problems, etc. and is on leave that has been granted by the employer for the mentioned illness

You can actually withdraw the money in EPF at any given time during the period of your service. It is not needed that you have a complete a specific number of years in the organisation to claim that money. You can always draw the money for treatment purposes, even if you have completed one or two years in your present organisation.

You must also remember that the maximum amount that can be availed by you is your six months’ salary. This amount may not be very big but still it will offer you some help that you might need in a crisis situation. Not only can this advantage be taken anytime, but also, it can be enjoy as many times as you want. Thus, your PF will save you for sure.

Certain documents must be provided by you along with the Form 31

  • Your employer must give a certificate stating the insurance scheme offered by him and the benefits that are not available for the member. If not this, then the member must provide a certificate issued by Employees’ State Insurance Corporation that would state that fact that the member can no longer avail the cash benefits provided by the Employees’ Insurance Scheme
  • The doctor must certify that hospitalisation for a period of one month is required in the case. Also, if there is a requirement for surgery, that must also be stated by the doctor in that certificate

2. Marriage Purposes

Money from your EPF can be withdrawn for an occasion like marriage in case you have already completed seven years of your service life. You can use up to 50 % of the amount that is there in your EPF account and you can enjoy this advantage for a maximum of three times. So, let us consider that you have around INR 5 lacs in your EPF account. However, you must not calculate the entire amount when you wish to withdraw it for your marriage purposes. Just your own contribution towards EPF along the interest accumulated on it is supposed to be calculated by you. Applicable cases are as follows.

  • Your wedding
  • Son’s wedding or daughter’s wedding
  • Brother’s wedding or sister’s wedding

3. Construction of house or purchase of property

You can withdraw some money from the EPF when you are planning to purchase a house or construct a house. However, you must understand a few rules first.

  • The land or house that you wish to purchase must be on your name, your spouse’s name or jointly in both your names. Any other combination will not be allowed
  • You must have completed a period of 5 years in your service
  • The maximum amount that you can avail from your EPF account is 24 times your monthly salary

If the property that you intend to purchase is in question then it should first become free from all related disputes. The property must be a registered one and the proof of the registration must also be provided.

4. Repaying the existing home loan

If you have taken a home loan and wish to prepay it then you may withdraw some amount from your EPF. But to avail this benefit you must have completed ten years of your service. However, you can only avail this advantage once in your entire lifetime. Also, you can either use the EPF for purchasing house or property or for repayment of present home loan. You cannot avail money for both of them.

The property for which you are making the payment must be in your name, your spouse’s name or jointly held by both of you. Many people have joint home loans with their siblings or parents. In such cases, you will not be able to avail this particular benefit. An amount equivalent to 36 times your monthly salary can be availed from the EPF for the repayment of the existing home loan.

5. Education purposes

Some money from your EPF can be withdrawn for Education purposes. This advantage can be availed only for post matriculation educational expenditures. This means, if you admit your daughter or son to any university or college then you will be able to draw money from the EPF account. You must complete seven years in your service before you can avail this benefit.

6. Alteration or Repairs of your house

After several years of staying in a house, you might think that it needs some repairs. Some alterations can also be an option which will make things convenient for you. But this is a costly affair and could very well burn a hole in your pocket. You can avail some money from the EPF for this purpose. But first you need to know some rules.

  • You can withdraw and enjoy a maximum of 12 times your monthly salary
  • From the date of construction, the house that you wish to repair must be at least five years old
  • You must have completed a period of ten years in your service life
  • This particular facility can be availed only once in the entire lifetime
  • The house that you wish you repair must be under your name, your spouse’s name or jointly under both of your names

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