Employee Provident Fund is a good investment option for salaried employees, which helps them save money for retirement. Under the EPF scheme, an employee has to contribute 12% of his basic salary each month towards his EPF account. An equal amount will be contributed by his employer. Only 3.67% of employer contribution goes towards EPF account. The remaining 8.33% goes towards the EPS account. Employee Provident Fund is managed by Employee Provident Fund Organization (EPFO).
EPFO allows its members to withdraw money from their EPF kitty for some specific purposes. EPFO recently allowed its subscribers to withdraw 75% of the EPF balance if they have been unemployed for a month. EPFO also allows complete withdrawal of EPF money if the subscriber is unemployed for more than two months. In this blog, we will be discussing some specific situations, where EPFO permits its members to make a partial withdrawal from EPF kitty.
1. An EPFO subscriber will be allowed to withdraw 50% of the amount accumulated from his EPF account, for his own marriage or for the marriage of his children or siblings. But he should have contributed towards EPF account for seven years.
2. The subscriber can withdraw the money for post-matriculation education for children.
3. An employee who has been sacked by the company can withdraw up to 50% of his contribution.
4. In case the company where the EPF subscriber is working has been closed down for more than 15 days and he has not been provided with any compensation or he has not received his wages for a continuous period of two months or more, he can withdraw money from the EPF. But, the withdrawal amount should not exceed the member's own total contribution including interest.
5. An EPFO subscriber can withdraw money from his EPF account, if he falls prey to diseases like leprosy, paralysis, tuberculosis, cancer, mental derangement or heart ailment and has to undergo a major operation or if he has been hospitalized for one month or more. He has to prove that he does not have the Employees' State Insurance Scheme facility and a doctor has recommended him surgery or hospitalization.
6. If the property of the member is damaged due to natural calamities like earthquakes and floods, he will be allowed to withdraw Rs 5,000 or 50% , whichever is less from his EPF account.
7. A physically handicapped member will be allowed a non-refundable advance from his EPF kitty, for the purpose of purchasing equipment which is used to minimize his hardship.
8. The Employee Provident Fund Organization allows its subscribers to withdraw money for construction of a house or for the purchase of a site. In order to withdraw the amount, the subscriber has to contribute towards his EPF account for at least five years.
9. EPFO allows its subscribers to withdraw up to 90% of the amount at any time after attaining the age of 55 years, to be transferred to Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana.