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Provident Fund Withdrawal Opportunity for Vital Needs

Ideally, your Employee Provident Fund is your Retirement Corpus. As such, DON'T touch it until you retire. In fact, even the EPF rules generally do not allow advances or withdrawals.

However, certain events in life come with huge financial implications. As such, if sometimes in life you fall short of money, you could take recourse to your Provident Fund. 

PF Act permits you to withdraw specified amounts for specified purposes. Summarized below are the key provisions in this regards.

Purchase or construction of a house.
- Minimum 5 years of membership is mandatory
- You can withdraw maximum 36 months of your Basic salary + Dearness Allowance OR total contribution (own + employer), including interest, whichever is lower
- Construction should begin within 6 months after 1st withdrawal 
- Construction should be completed within 12 months of last withdrawal
- No joint ownership property allowed except with the spouse

Purchase of a plot
- Minimum 5 years of membership
- Maximum 24 months of your Basic Salary + Dearness Allowance OR total contribution (own + employer), including interest, whichever is lower
- Purchase should be completed within 6 months of withdrawal
- No joint ownership property allowed except with the spouse

Read: Caution! Your PF Amount May Be Taxable

Don't eye your Employee Provident Fund, unless it is an absolute must

Repayment of housing loan
Minimum 10 years of membership
Maximum 36 months of your Basic Salary + Dearness Allowance OR total contribution (own + employer), including interest, whichever is lower

Addition / Renovation of house
- Minimum 5 years of membership
- Maximum 12 months of your Basic Salary + DA OR only your own contribution, including interest, whichever is lower
- The house should be at least 5 years old
- Another advance for home renovation permitted 10 years after the 1st withdrawal

Read: TDS On Provident Fund Withdrawals Is Now A Law

Marriage / Education expenses
- For marriage of self, children and siblings
- For post-matriculation education of children only
- Minimum 7 years of membership
- Maximum 50% of the own share of contribution in the account including interest as on date 
- Maximum three such advances are permissible
- Non-refundable advance

Medical treatment 
- For self / family including parents
- For specified serious illnesses (i.e. T.B., leprosy, paralysis, cancer, mental derangement or heart ailment), major operations or hospitalization exceeding one month
- No minimum years of service stipulated
- Maximum 6 months of your basic salary + DA or only own share of contribution, whichever is less
- Non-refundable advance

Read: EPFO's Journey From Apathy To Dynamism

Withdrawal one year before retirement
- At the age 54 or one year before actual retirement whichever is later
- Maximum 90% of the amount in the account as on date

- While the advances against education / medical are non-refundable, unutilized amounts withdrawn for house purchase / renovation, plot or loan repayment have to be redeposited into the account
- Except for house purchase / construction or repayment of home loan where employer's contribution is also considered, in all other instances only your own contribution is considered for calculation your maximum eligibility
- Advance for house / plot / loan repayment are permitted only once
- Application has to be submitted in the prescribed form and supported by appropriate proofs and documents

Read: Download Your Employees Provident Fund (EPF) E-Passbook

I repeat... don't look at your provident fund account at all... until retirement. 

Some of the above requirements can be planned; while others happen unexpectedly. It would be prudent if you can plan for the foreseen requirements and insure against the unforeseen ones. 

Only in rarest of the rare and exceptional situations, would I suggest that you prematurely withdraw money from your Provident Fund Account. This would be in your best interest and financially secure-cum-independent retirement.

Read: Retirement Planning : EPF Handsomely Beats NPS

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