If an employee loses his job before retirement, he can withdraw 75 percent of his total deposit amount from the Employees Provident Fund Organization (EPFO) only after one month. If unemployment persists for two months, he can withdraw his entire amount.
The remaining funds can be transferred to a new EPFO account upon getting a new job. EPFO has made changes in the withdrawal rules in this regard, making the withdrawal process more simple.
Fund Deposit and Withdrawal Process in EPFO
A salaried person deposits a part of his salary in EPFO, which matures after retirement. However, partial amount can be withdrawn from it from time to time if required.
Under the new rules, any member can apply for withdrawal of his deposit amount online. There is a provision for withdrawal of funds for education, purchase or construction of a house, marriage, or medical expenses.
90% withdrawal facility up to one year before retirement
According to the new rules, any employee can withdraw up to 90 percent of his total deposit amount one year before retirement. For this, the minimum age of the member should be 54 years. This provision is beneficial for those who are approaching retirement and need money immediately.
Provision of tax benefits
If an employee contributes to EPF for five years, he can get the benefit of tax exemption at the time of withdrawal. TDS (Tax Deducted at Source) will also be applicable on maturity. However, if the withdrawal is less than Rs 50,000, TDS will not be deducted. 10 percent TDS will be deducted on submission of PAN card, while in the absence of PAN card, this deduction will be 30 percent.
Online Application Process
EPFO members can use the EPF portal or Umang app to withdraw their funds. After submitting the application, the amount is transferred directly to the bank account upon approval from the employer. Along with this, members can also check the status of their application online, which keeps the process completely transparent.
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