The Employees’ Provident Fund Organization EPFO has revised several of its rules regarding withdrawal from the Provident Fund (PF) account in 2021. The aim of these revisions is to provide easier access to their PF funds to subscribers who are facing financial difficulties due to the coronavirus pandemic. According to the new rules, PF account holders can withdraw money equivalent to three months of their basic salary plus dearness allowance or 75% of the net balance in their PF or EPF account, whichever is lower. This will be taken as a non-refundable deposit.
When you make PF withdrawals, you can enjoy tax exemptions. However, this is applicable only when you make a withdrawal after offering 5 years of continuous service. It is also determined by the tax slab that is applicable to you. If you withdraw your PF Balance before the completion of 5 years, then tax deducted at source (TDS) or tax will be applied on your funds.
However, no tax will be levied on EPF withdrawals before 5 years in certain cases depending on the situation. They are:
♦ When you need to withdraw funds for medical emergencies or health issues that cannot be avoided
♦ When your full PF amount is lower than Rs.50,000
♦ When you withdraw your PF balance with Form 15G or Form 15H (If you submit PAN, then there will be a TDS at 10%)
♦ When you transfer your PF balance from a PF account to another account
♦ When the employer’s business is withdrawn
♦ How to withdraw PF
♦ How to do amendment in PF