Big question amid EPFO ​​3.0: Can 100% PF money be withdrawn while working? Know the strict rules of EPFO

New Delhi/Business Desk: Employees Provident Fund (EPF) is the most reliable and biggest means of ensuring financial security after retirement for crores of salaried people of the country. In this fund, a part of the employee’s basic salary and an equal contribution from the employer are deposited, on which the government also gives attractive interest every year. Amidst the recent discussions about ‘EPFO 3.0’ upgradation and improvement in digital services, the question arising in the minds of many employees is whether they can withdraw 100 per cent (full) money from their PF account whenever they want for any of their needs?

The simple and clear answer is – ‘Absolutely not’. According to the strict rules of the Employees Provident Fund Organization (EPFO), you are not allowed to withdraw the entire amount from your PF account while you are in job. 100% withdrawal is possible only in some very special and urgent circumstances.

You can withdraw full PF money only under these 2 special circumstances

As per the current EPFO ​​guidelines, any account holder can withdraw 100% of his PF money (Final Settlement) only in the following situations:

• On completion of retirement age: When the employee completes 58 years of age after joining his/her job, he/she becomes fully eligible to withdraw the entire amount deposited in his/her EPF account (employee + employer’s share + interest).

• In case of job loss or unemployment: If an employee loses his job and becomes unemployed, he can withdraw the entire fund. However, there is a time limit for this also.

What is the ’75:25′ formula for withdrawing money during unemployment?

EPFO has made a special arrangement to save the employees from immediate financial crisis in case of job loss. According to the rules:

• After being unemployed for 1 month: Exactly one month after leaving the job (on completion of 30 days), the employee can withdraw his maximum PF amount. 75 percent The share can be withdrawn as advance.

• After being unemployed for 2 months: If the employee does not get a new job for two consecutive months (60 days) or more, he/she will lose the balance in his/her account. 25 percent You can also withdraw the amount and make your full and final settlement.

Withdrawal of PF as soon as you get a new job is a loss-making deal, best to transfer.

It is often seen that many employees withdraw their old PF amount directly into their bank account as soon as they change the company. EPFO and financial experts strictly prohibit doing so. The organization says that after changing jobs, you should transfer your old PF amount online to the PF account of the new company with the help of your Universal Account Number (UAN).

By doing this, the sequence of compounding interest on your PF account is not broken, your total service history (service period) remains continuously linked (which is necessary for pension in future) and a huge fund is created by retirement. Withdrawal of PF money repeatedly makes your future insecure and if the service period is less than 5 years, you may have to pay heavy tax on the amount withdrawn.

The facility of ‘Partial Withdrawal’ (PF Advance) will be useful in EMI.

Even though you are not allowed to withdraw 100% of the amount during your job, EPFO ​​provides its members with the excellent facility of Partial Withdrawal i.e. PF Advance for some important and emergency needs of life. You can withdraw money from your PF account up to a certain limit for the following operations:

• For higher education of self or children and marriage.

• To buy a new house, buy a plot or get a house built.

• To repay the remaining EMI of home loan.

• For treatment of any serious illness in the family (Medical Emergency).

Keep in mind that the eligibility to withdraw money from PF, minimum time limit of job and maximum limit of withdrawal have been decided separately for each need.

Please think carefully before final settlement

Finance experts believe that EPF should not be seen as just a savings account, rather it is a talisman for your old age. In this, along with your and the company’s contribution, the government interest received annually increases your fund rapidly. Therefore, unless there is a very serious crisis, instead of withdrawing the entire PF money, leave it intact in the account, so that after retirement, your financial freedom and security remains strong.