PF Withdrawal: 5 Scenarios Where No TDS Is Charged on EPF Withdrawals | Employee Provident Fund: Step by Step PF Withdrawal Rules 2024

 

New Delhi: Provident Fund (PF) is one of the safest savings options for many working professionals. The money in your EPF account can be withdrawn when you retire, resign, or in emergency situations.

If you resign (and not retire), you must wait two months to withdraw the PF amount. The EPFO allows tax-free withdrawals if you follow the rules laid down in their guidelines.

If you withdraw your EPF with less than 5 years of service and the amount is more than ₹50,000, TDS will be deducted as follows:

1. If PAN and Form 15G/15H are submitted: No TDS is deducted.
2. If PAN is submitted but not Form 15G/15H: TDS is deducted at 10%.
3. If PAN is not submitted: TDS is deducted at the Maximum Marginal Rate of 34.606%.

No TDS is deducted in these cases:

1. When PF is transferred from one account to another.
2. If service is terminated due to ill health, business closure, project completion, or reasons beyond the employee's control.
3. If PF is withdrawn after 5 years of service.
4. If PF is less than ₹30,000 and the employee has less than 5 years of service.
5. If PF is ₹30,000 or more, with less than 5 years of service, but Form 15G/15H is submitted with PAN.

Related Videos:

Budget 2024: Big Employees' Provident Fund Move As Modi Govt Focuses On Middle Class | Nirmala

Also Read:

EPFO: PF Withdrawal Rules 2024

The Employees’ Provident Fund (EPF) is a long-term savings plan built with contributions from the employee, the employer, and sometimes the government. It is managed by the Employees’ Provident Fund Organisation (EPFO) to provide financial security when a person retires. The money saved, along with interest, is given to the employee when they retire.

Employees can withdraw their EPF in the following cases:

• At the time of retirement (after age 58)
• If unemployed for more than two months
• In case of death before the retirement age

Note: According to the latest EPFO guidelines, members can withdraw funds from their PF account to handle financial problems caused by the Covid-19 pandemic. They can withdraw 75% of the total balance or an amount equal to three months of basic salary plus dearness allowance, whichever is lower. This withdrawal is non-refundable.

Online EPFO claims are processed within 72 hours, while offline claims can take up to 20 days. However, there are specific EPF withdrawal rules that must be followed to withdraw money from the PF account.

Eligibility for Different Types of EPF Withdrawals

For Medical Purposes:

• An employee can withdraw either their own contribution with interest or six times their monthly salary (whichever is lower) for medical treatment.
• This applies to medical treatment for the employee, spouse, children, or parents.
• There is no required service period for this type of withdrawal.

For Repaying a Home Loan:

• An employee can withdraw up to 90% of their EPF balance to repay a home loan if the house is in their name or held jointly.
• At least 3 years of service is needed to be eligible.

For Marriage:

• After completing 7 years of service, an employee can withdraw 50% of their contribution with interest.
• This withdrawal can be made for their own, sibling’s, or child’s marriage.

For Renovating or Reconstructing a House:

• Employees can withdraw from their EPF for home renovation or reconstruction if the house is in their name or jointly with a spouse.
• They must have completed 5 years of service.
• Up to 12 times their monthly salary can be withdrawn.

For Purchasing or Constructing a New House:

• An employee can withdraw funds to buy a plot or construct a house, with the property in their name or jointly with a spouse.
• A minimum of 5 years of service is required.
• They can withdraw up to 24 times their monthly salary for buying a plot or 36 times for buying or constructing a house.
• This withdrawal can be made only once in their career.

For Retirement:

• After the age of 58, employees can withdraw their entire EPF balance.
• Up to 90% of the provident fund can be withdrawn.

For Unemployment:

• An employee can withdraw 75% of their EPF balance if unemployed for more than a month.
• After 2 months of unemployment, the remaining 25% can be withdrawn.

 EPF Withdrawal Rules 2024

EPF is meant to be a retirement fund, so withdrawals should be avoided unless necessary. Here are some key rules:

• If you withdraw your PF before completing 5 years of service, it will be taxable. No TDS is applied if the withdrawal is less than ₹50,000.
• You don't have to withdraw PF when changing jobs; it can be transferred to your new account.
• You cannot withdraw PF from a current job.
• Partial withdrawals (loans) can be taken from your EPF account.

  In 2016, the Government of India made changes to EPF withdrawal rules:

• 90% of the EPF balance can be withdrawn after the age of 54.
• After leaving a job, 75% of the balance can be withdrawn if unemployed for 1 month, and the remaining 25% after 2 months.

Related Videos: 

A step-by-step guide to your EPF online and offline withdrawal process | Partial and Full withdrawal