As we are all aware, EPF is the Employees’ Provident Fund which is considered like a retirement fund towards which your employer contributes. If you want to withdraw EPF money partially from the EPF account, you could do so. It will be a non-refundable loan. However, it is not advised unless there is a severe or urgent need for funds and withdrawing from the EPF is the last resort. Even then you have to prove that your requirement for funds is genuine. Also, the officials go through the application thoroughly before allowing the partial withdrawal.
There are certain situations when you can apply for a non-refundable loan or an advance from the provident fund. These are –
- Higher education
- Medical treatment
- Home loan or buying a home
- Natural calamity
- Lockout in company
- Withdrawal before retirement
A non-refundable loan can be applied for on the EPF for higher education of the account owner himself/herself or for blood relations, such as the daughter, son, sister or brother. However, the following conditions must be met with to apply for a loan for education –
- Having completed service of 7 years
- The withdrawal can be of only 50% the EPF balance
- This loan can be applied for a maximum of only three times in your lifetime
Given the high cost of medical treatments in the present time, you can withdraw money from your provident fund for medical emergencies, before you have retired. This is as per para 68(J) EPF and the MP act of 1952.
The points to consider when applying for this loan are-
- The loan must be for the medical treatment of yourself or your spouse, children, or parents who are dependent on you.
- The patient must be hospitalized for at least a month.
- If the loan is for self, then you must be on leave from the company.
- The loan can be applied for diseases, such as heart disease (without need for hospitalization), paralysis, tuberculosis, cancer, mental disorder and leprosy.
- The amount withdrawn can be six times (basic pay + dear allowance (DA)).
- A loan can be taken any number of times for medical treatments.
- Proof from the hospital and/or specialized doctors must be provided as and when required for availing loans for medical treatments.
You can apply for a partial loan for the marriage of yourself or that of your blood relations, such as brother, sister, daughter, or son, while you are still working as per the para 68(K) EPF and the MP act of 1952. Proof or supporting documentation, such as the marriage invitation card, must be provided to avail the loan for marriage. Following conditions must also be met-
- Must have completed a service of 7 years in the company.
- Loan can be applied for 50% of the balance present in EPF.
- Can apply for loans for marriages for maximum of three times in your entire life.
Construction or buying a home or plot
Buying a home or constructing one is a costly affair even though it is a dream for everyone to have their own home. Considerable thought must be given to withdrawing from EPF for purchase or construction of your house because the EPF account is your retirement fund. If you decide to apply for nonrefundable loan from EPF, the following conditions must be met –
- You must have completed 5 years of service in the company.
- The house you wish to purchase or build must either be in your name or that of your spouse.
- There should be no other partner or joint holder apart from you and the spouse.
- The loan can be applied for only once in your lifetime.
- The amount you can apply for, for construction of or purchase of your house, is 36x (basic pay + dear allowances).
- Submission of Form 31 is needed for this loan application.
- In case of buying a plot, you can withdraw 24x (basic pay + DA) .
- The purchase agreement needs to be submitted if you are buying the house or plot.
- If you wish to alter or make additions to the old house, you can withdraw up to 12x (basic pay + DA).
- Loan for alterations can be applied for only after 5 years of construction.
- Loan for repair of house can be applied for after 10 years of its construction.
Repayment of home loan
For the repayment of home loan, you must have completed 10 years of service to apply for a partial loan withdrawal on your EPF.
There are no rules for applying for loan for withdrawal in the event of natural calamity other than withdrawing under para 68(L) EPF and MP act of 1952. The amount withdrawn can be only 50% of the contribution made by the employer. The proof of damages done by the calamity must be submitted.
Lockout in company
When the company you work for is not being able to pay you your salary, you can withdraw from your EPF to meet with the daily basic needs. This is however not recommended as EPF is your retirement corpus but if there is no alternative you can apply for loan under para 68(H) EPF and MP act 1952, when the following conditions are met –
- The company is closed for minimum of 15 days and you have not received your salary for minimum 2 months.
- The amount you can withdraw is the (basic pay + DA) that has not been paid to you. The employee contribution in the account should be more than what you can withdraw.
- If the company is closed for more than 6 months and you are still unemployed, you can withdraw the entire employer contribution amount.
Withdrawal before retirement
Under para 68(NN) EPF and the MP act 1952, you can withdraw the EPF 1 year before your retirement. The pre-retirement withdrawal needs you to
- Be above 54 years of age
- Up to 90% of the EPF can be withdrawn.
- Proof in the form of a certificate needs to be obtained from the employer to validate the date of retirement.
Procedure to apply for non-refundable loan or advance from the PF or provident fund
You need to submit Form 31 to the concerned Provident Fund office after getting the form attested from your employer. Also, carry required documentation to apply for the advance.
There is no need to carry employer attestation if your UAN has been activated and linked to your Aadhaar card as well as bank account. In that case simply submit the New Form 31.