The Employees’ Provident Fund is one of the biggest pools of long-term savings for salaried employees. However, when you lose employment or have to switch jobs and you need to withdraw money from your PF then an obvious question that arises is how much of your PF can you withdraw and when.
When can you withdraw your full PF balance?
You can withdraw all of your EPF balance when you retire at the age of 58. You are also allowed to withdraw the full amount if you are unemployed for two months after leaving your job.
How much PF can you withdraw?
Employees who lose their jobs can immediately withdraw their PF funds. If a member is unemployed, they can withdraw up to 75 percent of the total PF balance right away and the remaining 25 percent after one year.
However, if you wish to withdraw the full amount then you can do so after two months of unemployment. But generally, full PF withdrawal is not allowed if someone loses their job. Members can withdraw up to 75 percent of the total PF balance right away and the remaining 25 percent after one year.
EPFO members must keep a 25 percent deposit in their account at all times and can only withdraw the remaining 75 percent of their money. The 25 percent deposit allows members to get interest benefits.
If a member wishes to withdraw the remaining 25 percent, they can do so after one year.
The withdrawable amount includes both employee and employer contributions, along with the interest.
Is your PF withdrawal tax-free or not?
If you withdraw your EPF before completing five years of continuous service then the withdrawal will be taxable. There may be tax on the employer’s contribution and interest earned and TDS may apply if the withdrawal exceeds the prescribed threshold. However, your EPF withdrawal is generally tax-free if you have been employed continuously for over five years and have transferred your PF each time even between changing employers.
What about your pension?
According to EPF rules, your EPF membership continues even after you leave your job. It continues until you have withdrawn all your PF funds. If you quit your job and do not make any contributions to your PF account, interest will continue to accrue for three years. You can withdraw this money whenever you wish by filing an online claim.
If you join a new job and open a new EPF account, you can transfer your old PF through your UAN. Your membership and contributions will reactivate after the transfer. This not only ensures that your service period is considered continuous but also allows interest to accrue.
When can you withdraw EPS?
If you have contributed to the Employees’ Pension Scheme for at least 10 years then you cannot withdraw the pension portion as a lump sum. You become eligible for a pension at 58. If your service is less than 10 years and you leave employment then you can apply for withdrawal benefits from the pension component.
