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Know About EPF- Employee Provident fund & Its Withdrawal Rules

Updated: Feb 6

What is EPF?

The Employees' Provident Fund (EPF) is a savings initiative overseen by the Employees' Provident Fund Organisation, operating under the auspices of the Ministry of Labour and Employment, Government of India. This scheme is crafted to instil a culture of savings among salaried workers while nurturing a robust retirement corpus for their future needs.

the Employees' Provident Fund (EPF) requires both employees and employers to contribute 12% of the employee's basic salary and dearness allowance. Currently, EPF deposits yield an annual interest rate of 8.15%, with accrued interest being tax-free upon withdrawal. At retirement, employees receive a lump-sum amount including the accrued interest. EPF India offers convenient online services through its user-friendly portal for easy access and efficient transactions.

Who is eligible For EPF?

Upon joining an establishment with more than 10 members , all employees are eligible to enrol as members of the Provident Fund. Membership grants access to Provident Fund, pension, and insurance benefits. As part of the enrollment process, each employee must complete a nomination form, ensuring that beneficiaries are designated in the event of unforeseen circumstances.


The Employees' Provident Fund Organisation (EPFO) is the apex body responsible for overseeing the implementation and management of the Employees' Provident Fund (EPF) Scheme, the Employees' Pension Scheme (EPS), and the Employees' Deposit Linked Insurance (EDLI) Scheme in India.

Objectives of EPFO

  • Social Security: EPFO aims to provide social security to employees by ensuring the accumulation of funds for their retirement, family security, and housing needs.

  • Savings Culture: It promotes a culture of savings among employees by facilitating long-term savings through mandatory contributions from both employees and employers.

  • Financial Stability: EPFO contributes to the financial stability of employees by offering secure investment options and guaranteed returns on their contributions.

  • Employee Welfare: EPFO works towards the welfare of employees by providing various benefits such as provident fund, pension, and insurance coverage to ensure financial security during different stages of their lives.

  • Compliance: EPFO ensures compliance with the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and related rules and regulations.

Schemes Managed by EPFO:

  1. Employees' Provident Fund (EPF) Scheme: Under this scheme, both employees and employers make monthly contributions, which accumulate over time and provide financial security to employees upon retirement.

  2. Employees' Pension Scheme (EPS): EPS provides pension benefits to employees who are members of the EPF scheme. It offers pension benefits to employees after attaining the age of 58 years or in case of disability or death.

  3. Employees' Deposit Linked Insurance (EDLI) Scheme: EDLI provides life insurance coverage to employees who are members of the EPF scheme. It offers insurance benefits to the nominee or legal heir of the deceased employee.

Benefits of EPF:

The Employees' Provident Fund (EPF) offers several benefits to employees, contributing to their financial security and well-being. Here are some key benefits of EPF:

  • Retirement Corpus: EPF serves as a long-term savings scheme, helping employees accumulate a substantial corpus for their retirement. The contributions made during the working years, along with the accrued interest, provide financial support during retirement.

  • Employer and Employee Contributions: Both the employer and the employee contribute a fixed percentage (usually 12%) of the employee's basic salary and dearness allowance towards EPF, fostering a collaborative approach to savings.

  • Interest on Deposits: EPF deposits earn interest, and the government declares the interest rate annually. Historically, EPF interest rates have been competitive, often surpassing those of standard savings accounts.

  • Tax Benefits: Contributions made to EPF are eligible for tax benefits under Section 80C of the Income Tax Act. Additionally, the interest earned on EPF deposits and withdrawals at the time of retirement are generally tax-free.

  • Emergency Withdrawals: In certain situations, employees can make partial withdrawals from their EPF accounts for specific purposes such as medical emergencies, home loan repayments, education, or marriage.

  • Insurance Benefits: EPF provides life insurance coverage to members. The employee is automatically enrolled in the Employees' Deposit Linked Insurance (EDLI) scheme, which provides life insurance coverage in the unfortunate event of the member's demise.

  • Nomination Facility: Upon joining the EPF scheme, employees are required to nominate beneficiaries. This ensures that in the event of the employee's death, the accumulated funds can be smoothly transferred to the nominated individuals.

  • Portability: EPF accounts are portable, meaning that the account remains the same even if the employee changes jobs. This ensures continuity of savings and simplifies the management of the provident fund.

  • Online Services: EPFO provides online services for members, allowing them to check their balance, transfer funds, and make withdrawals conveniently through the official portal or mobile applications.

EPF Interest Overview:

In the financial year 2023-24, the EPF scheme offers a fixed interest rate of 8.15% on investments. Interest accrued in a PF account remains tax-free. However, interest accrued on operative PF accounts of retiring employees is subject to taxation based on their respective tax slabs.

Taxation for EPF

EPF (Employees' Provident Fund) taxation in India is as follows:

  1. Contribution Stage:

    1. Employee contributions are tax-deductible under Section 80C.

    2. Employer contributions are not taxable for employees.

  2. Interest Stage:

    1. Interest earned on EPF is tax-exempt.

  3. Withdrawal Stage:

    1. Withdrawals after 5 years of service are tax-free.

    2. Withdrawals before 5 years may be taxable, depending on the circumstances.

    3. Withdrawals over Rs. 50,000 before 5 years may attract TDS.

  4. Post-Employment Interest:

    1. Interest earned after employment cessation is taxable.

EPF Withdrawal Rules

Individual is not allowed to withdraw before PF funds before retirement except for below mentioned purposes

  • In Case of Unemployment : Withdraw up to 75% of the accumulated amount if employee is unemployed for more than 1 month. Remaining 25% can be withdrawn if the unemployment period is more than over 2 months.

  • For Education : Can withdraw 50% of the total employee’s contribution to EPF to pay for their higher education or to bear the education cost of their children after class 10. Withdrawal is permission only in case contribution in EPF is for more than 7 years.

  • To Pay for Marriage PF withdrawal rules allow to withdraw up to 50% of the employee’s share to pay for the expenses for a marriage. The marriage should be of the individual concerned, or the account holder’s son, daughter, brother, and sister. Again withdrawal is allowed only after the completion of 7 years of PF contribution.

  • For Specially-abled Individuals Specially-abled account holders can withdraw 6 months basic wage along with dearness allowance, or employee share with interest (whichever is less), to pay for the cost of equipment.

  • For Medical Emergencies A PF or EPF withdrawal is allowed to pay for urgent medical treatments for certain diseases off self or for immediate family members. 6 month’s basic wage and dearness allowance, or the employee share along with interest, whichever is less can be withdrawn.

  • To Pay for Existing Debts Allowed to withdraw from EPF upto 36 months of basic wage + dearness allowance, or the total of employee and employer share along with interest to pay their home loan EMIs.  However, this facility is available only after a minimum of 10 year’s contribution towards the EPF account.

  • To Purchase Residential Property or Land Plots According to PF withdrawal rules, the account holder is allowed to make a premature withdrawal to purchase empty land or prefabricated houses. 

EPFO has allocated a PF withdrawal limit for this purpose; for example – 

Contribution towards EPF

Withdrawal Limit


24 month’s basic wage and Dearness Allowance

The accumulated funds from the EPF account, including the employee and employer’s share. 

To purchase a house, flat, or to construct a residential property.

36 month’s basic wage plus Dearness Allowance

The accumulated funds along with the total interest, whichever is lower.

To purchase or construct a residential property or flat.

  • For Home Renovation From Provident fund you can withdraw 12 month’s basic wage plus Dearness Allowance, as well as the employee’s share with interest (whichever is smaller) for home alteration, improvement, or expansion. The residential property can be of the PF account holder, owned by his or her spouse, or owned jointly. An individual can avail this facility 2 times, once after 5 years of completing the residential property, and after 10 years can withdraw PF amount for the first time.

  • Just Before Retirment Revised EPF withdrawal rules also allow an account holder to withdraw up to 90% of the accumulated funds after they reach 54 years of age or a year before retirement/superannuation. 

  • Sudden Death Also, in case of the sudden demise of an employee (while he or she is still in service), their nominee/beneficiary can apply for a settlement (Form 20), or a monthly pension (Form 10D).

Withdrawal of EPF

Withdrawal Process - Online:

To initiate EPF withdrawal online, individuals should follow these steps:

  • Log in to the UAN Member e-Sewa portal.

  • Select the 'Online Services' tab and click on 'Claim (Form-31, 19 & 10C)'.

  • Review the displayed member details on the screen.

  • Enter the bank account number linked with the EPF account and proceed to 'Verify'.

Withdrawal Process - Offline:

If opting for offline PF withdrawal, individuals must visit the respective EPFO office. They should then submit the duly completed Composite Claim Form. It's important to note that there are two variants of the Composite Claim Form: Non-Aadhaar and Aadhaar.

How to Register In EPF?

EPF Registration Process for Employers:

  1. Visit the EPFO website and select "Establishment Registration."

  2. Download the user manual for guidance.

  3. Sign up on the Unified Shram Suvidha Portal (USSP).

  4. Fill out the EPF registration form with company details.

  5. Attach the employer's Digital Signature Certificate (DSC).

  6. Receive confirmation of successful registration via email.

Prasanna Laxmi R., Assistant Content Manager

An MBA student specializing in Finance, driven by a keen interest in exploring the complexities of finance to navigate the business landscape.


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