New EPF Loan, Advance, Partial Withdrawal Rules You Must Know

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New EPF Loan, Advance, Partial Withdrawal Rules You Must Know: Although Employee PF is a retirement saving – you are allowed to take loan, partial withdraw and advance from your EPF accumulation for the below purposes:

  • House Purchase
  • Expenses incurred towards Marriage & Education
  • House construction
  • Medical treatments
  • Home Loan repayment
  • Home renovation and repairs at home.
New EPF Loan, Advance, Partial Withdrawal Rules You Must Know
Every EPF member needs to be clear about these rules & criteria in order to apply for the same.

1. EPF Advance for purchase of house/flat, construction of house.

If you are planning to partially withdraw your Employee Provident Fund amount for the purpose of flat or house purchase including an already built one or buying a site or for the construction of a new flat or house.

  • You must have completed a minimum of 3 years of service
  • You must have made a minimum of 3 years contribution to your EPF account
  • The permissible amount that can be withdrawn is 90% of the EPF balance or the total cost of your commitment which is lesser on a comparative scale
  • Withdrawal for such purposes is allowed only once in a life time
  • No declaration needs to be submitted for EPF partial withdrawal purposes under this category. However, In order to take an EPF advance for the purchase of flat or house an Application Letter needs to be submitted to the Commissioner of RO/SRO.
  • These clauses are applicable for properties held individually by the Employee, his spouse or jointly by both.

Also read: How to download your EPF passbook

2. EPF Advance for Home renovation and repairs your home.

If you are planning to partially withdraw your EPF amount for the purpose of altering or making improvements in the flat or house you are dwelling in, then

  • You can do so only after 5 years after the construction of the house or flat
  • The permissible amount that can be withdrawn is Employee share of EPF along with the interest component or 12 months of basic wages of the Employee including Dearness Allowance (DA) or the actual cost of alterations whichever is the lowest
  • Withdrawal for such purposes is allowed only once in a life time
  • No declaration needs to be submitted for EPF partial withdrawal purposes under this category
  • These clauses are applicable for properties held individually by the Employee, his spouse or jointly by both

3. EPF Partial withdrawal for repayment of Home loans.

If you are planning to partially withdraw your EPF amount for the purpose of Home Loan repayment, then

  • You must have completed a minimum of 10 years of service
  • The permissible amount that can be withdrawn is 100% EPF balance or the total home loan outstanding amount or 36 times of monthly salary whichever is lower
  • Withdrawal for such purposes is allowed only once in a life time
  • Needs to submit Loan Statement to the Employer from the Institution to which loan amount is due along with Form 31

4. EPF advance for Medical treatments

If you are planning to partially withdraw your EPF amount for the purpose of Medical treatments, then

  • No minimum years of service is stipulated as a mandatory clause for treatment of self or for the family
  • The permissible amount in both cases is a maximum 6 months basic salary jointly with DA (Dearness Allowance) or the Employee share of PF contribution including the interest it has earned till then.
  • Partial withdrawal of EPF for Medical purposes is allowed as many times as any Medical emergency arises.
  • Certificate C must be produced approved by the Doctor and the Employer

5. EPF advance for Marriage & Education

If you are planning to partially withdraw your EPF corpus for the purpose of Education or Marriage expenses, then

  • You must have completed a minimum of 7 years of service
  • The permissible amount that can be withdrawn at any point of time is 50% of the EPF contribution along with the interest component it has earned
  • Withdrawal for such purposes is allowed three times during your service period
  • In the case of partial withdrawal of EPF for marriage purposes the concerned Employee must declare the same in Form 31
  • In the case of partial withdrawal of EPF for education purposes, a declaration is to be taken from the Head of the Institution where the higher education is to be carried out must be obtained about the course of study and the approximate estimated expenditure. This must be submitted along with Form 31

6. EPF advance for physically handicapped members

If you are planning to partially withdraw your EPF amount for the purpose of purchasing equipment’s that can minimize the hardships caused by any type of handicap, then

  • No minimum years of service is stipulated as a mandatory clause
  • The permissible amount that can be withdrawn at any point of time is 6 months Basic wages along with DA (Dearness Allowance) or the EPF contribution along with the interest it has earned till then or the actual cost of the equipment to be bought – whichever is the lowest.
  • Withdrawal for such purposes is allowed once in three years
  • In the case of partial withdrawal of EPF for the management of handicap purposes, the concerned Employee must get a Medical Certificate from an approved Medical Practitioner and submit along with Form 31

 

Special case: If an Employee who is more than 54 years of age partially withdraws from EPF within a year from his date of retirement, he is allowed to withdraw a maximum of 90% of contribution irrespective of the purpose of withdrawal.

Process of Applying for PF Advance and Withdrawals

Now, EPFO has made all types of EPF withdrawal and EPF Advance online to its members. Only criteria is, you need to link your Aadhaar with UAN. I have written a separate post on how to link your Aadhaar with UAN. You can also apply your EPF withdrawal offline using a simple new EPF withdrawal form. The best thing about this new form is that it does not require the approval of your employer. 

 

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