EPFO Withdrawal Rules: Money can be withdrawn from EPF if needed, but strict action will be taken for misuse of funds.
By Shyamu Maurya
Copyright informalnewz
Under the EPF Scheme, 1952, withdrawals from EPF deposits are permitted under certain circumstances. These include higher education, marriage, medical treatment, and home purchase. PF deposits cannot be withdrawn for any other reason.
EPFO Withdrawal Rules: The EPFO ​​recently warned subscribers that EPF funds should not be used for unauthorized purposes. The EPFO ​​stated that subscribers found using EPF deposits to invest in unauthorized schemes could face action and penalties.
Permission to Withdraw Funds in These Situations
This entire issue relates to withdrawing some of the EPF deposits before retirement. Under the EPF Scheme, 1952, withdrawal of a portion of EPF deposits is permitted under certain circumstances. These include higher education, marriage, medical treatment, and home purchase. Other than this, PF deposits cannot be withdrawn for any other reason. This is because EPF deposits are intended for a person’s post-retirement needs.
Full withdrawal is available only after retirement.
Under EPFO ​​rules, the entire amount deposited in EPF is available only upon retirement. Even if an employee remains unemployed for more than two months, they can withdraw the EPF amount. There is a two-month waiting period after the employee leaves the job. Subscribers also need to understand that if EPF funds are withdrawn before completing five years of service, they are taxable.
Action will be taken against misuse of funds.
If EPF funds are withdrawn and misused, the EPFO ​​has the right to take action against the subscriber. They can recover the entire amount along with interest. This can be illustrated with an example. According to the EPF Scheme, 1952, withdrawal of some EPF funds is permitted under certain circumstances. Suppose an employee withdraws EPF funds to build a house, but uses it for something else. This would be considered misuse of funds. Employees will then be barred from withdrawing the money for the next three years. This freeze can be lifted if they repay the money plus interest.
Money deposited in EPF for post-retirement needs
Experts say that the purpose of a provident fund is to ensure the subscriber’s financial security after retirement. This is why pre-retirement withdrawal rules are very strict. If a subscriber withdraws this money before retirement and spends it on other things, they may face financial difficulties after retirement.
