When can you withdraw money from Provident Fund?

Although an individual receives his/her entire Provident Fund (PF) amount post retirement, if there’s an emergency, one can also take a loan against their PF .

But remember, the money in your PF is to financially safeguard your retirement. Hence, there are some withdrawal conditions. Moreover, you don’t have to repay advance or loan you take from your PF account. Naturally, you’re also not liable to pay any interest on this loan.

Lets understand what are some of the conditions under which you can withdraw funds from your PF:

For education:

You can withdraw funds from your PF after your child finishes class 10th. However, the condition is that your PF account should be at least 7 years old. If Sahil fulfills this condition, he can withdraw 50% of the total amount deposited in his account. So, if Sahil has Rs 4 lakh or more in his PF account, he can easily get his hands on the Rs 2 lakhs he needs.

Next is for marriage:

You can also utilize your PF amount for weddings. If your account is 7 years or older, you can withdraw 50% of the total amount for wedding purposes, be it your own, your child’s or your brother or sisters. For education and wedding, you can withdraw funds from your PF account a maximum of 3 times.

Buying or constructing a home is the most popular way of utilizing PF funds. If you are buying a house or plot, or constructing a house, you can withdraw funds from your PF account. For this, you should be an EPFO member for at least 5 years. In such a case, you can withdraw the entire amount from your account. For buying a plot, you can withdraw up to 24 months of basic salary, and for its construction, you can draw up to 36 months of your basic salary. You can also avail this facility for repairing your house.

Next comes paying back home loans:

If you are facing any troubles in paying back your home loan, you can use your PF funds to repay some of it. However, to avail this facility, your account should be at least 10 years old. You can withdraw up to 36 times of your monthly salary.

In some cases, you can withdraw funds from your PF account anytime. For instance, if you are suffering from a critical disease, have been rendered permanently disabled during work, or if the company ceases operation, you can draw funds. In such a case, the duration of your job won’t be considered. In fact, if your job has been adversely impacted by natural disasters, the duration of the job won’t be considered.

Now that you know in which situations you can withdraw funds, lets understand how you can withdraw this money:

You can apply for withdrawing funds from your PF account both via offline and online means. For this, your universal account number (UAN) and Aadhar should be linked. You do not need the prior approval of your current employer before taking out these funds. You have to fill the PF advance claim form stating the reason for your PF withdrawal. If you apply online, you should receive your funds within 7 days of application. However, it can take up to 2 weeks for the same if you have applied offline.

What do experts say?

Tax and Investment expert Balwant Jain says that during an emergency, taking funds from your PF account is a viable option. However, this does not mean that you keep on drawing funds from it for everything. Your PF account is linked to your retirement, hence, withdraw funds only when all other ways of getting funds are exhausted.