The Employees’ Provident Fund (EPF) which serves as a mandatory savings and retirement fund for eligible employees has undergone notable changes in the financial year 2023-24. The Employees Provident Fund Organisation (EPFO) has revised the interest rate to 8.25%, marking an uptick of 0.05% from the previous fiscal year's rate of 8.10%. This adjustment not only impacts the annual interest earnings but also shapes the financial decisions of millions of workers.
Mandated by EPF regulations, employees to put in 12% of their monthly basic salary, and employers are obligated to match this contribution.
Accrued funds earn annual interest. This article functions as an essential guide, examining the most recent updates in EPF withdrawal rules for 2024. From the intricacies of eligibility criteria to procedural details, we delve into the aspects shaping provident fund withdrawals in the present year.
Probable Reasons for PF Withdrawal
- For Medical Purposes: If employees have medical expenses, they can withdraw either their PF contribution with interest or up to six times their monthly salary, whichever is less. This option is for medical treatments for themselves, their spouse, children, and parents. Importantly, there is no waiting period or minimum work duration required, ensuring quick financial help during tough health situations.
- For Repaying Home Loan: Members with outstanding home loans can withdraw up to 90% of their provident fund corpus if the house is registered in their name or held jointly. However, a minimum of 3 years of complete service is a prerequisite for this withdrawal, ensuring a balance between service tenure and financial assistance for home loan repayment.
- For Wedding: Eligibility for wedding-related withdrawals requires a minimum of 7 years of service. Contributors can withdraw 50% of their contribution with interest for their own, siblings', or child's marriage, providing financial aid for significant life events.
- For Renovating and Reconstructing a House: Employees planning renovations or reconstruction can withdraw funds from their EPF account, provided the house is held in their name or jointly with their spouse. A minimum of 5 years of total service is required, and members can withdraw up to 12 times their monthly salary from the provident fund account.
- For Purchasing or Constructing a New House: Members aiming to purchase or construct a new house can withdraw a partial amount from their EPF, subject to the property being registered in their name or jointly with their spouse. This option is available after completing a minimum of 5 years of total service, with withdrawal limits defined by salary multiples or the cost of the property. Importantly, this withdrawal can only be made once during the entire service tenure.
- For Retirement: Upon reaching 58 years of age, individuals can withdraw their entire provident fund corpus, with the flexibility to withdraw up to 90% of the balance, offering financial security in the retirement phase.
- For Unemployment: In the face of unemployment, individuals can withdraw 75% of their provident fund after one month of unemployment. For unemployment exceeding two months, the remaining 25% of the corpus can also be withdrawn, providing a financial cushion during extended periods of joblessness.
- For education: Individuals with PF accounts can withdraw 50% of their total employee contribution to EPF. This can be utilised for higher education expenses or to cover the educational costs of their children after completing class 10.