Many conditions apply to premature withdrawal.
If you also take out PF funds immediately if you need money, then this information can be useful for you. The Employees Provident Fund Organization (EPFO) has warned those who want to spend their provident fund (PF) saving for reasons that are not included in government rules and regulations.
Therefore, EPF account holders should know about the rules and regulations as well as the fees that apply to premature withdrawal ie premature withdrawal, along with rules and regulations.
What is premature withdrawal?
Premature withdrawal from EPFO means withdrawing money from the Employees Provident Fund (EPF) account before retirement, which is taken as advance. This withdrawal can be partial or complete. According to official data, if you withdraw money from EPF account for reasons that are not specified in the EPF scheme 1952, then it will be considered a violation of the rules. In the event of a violation, EPFO has the right to recover the incorrect amount withdrawn and impose additional penalty on it. According to media reports, EPFO had warned about premature withdrawal so that the misuse of PF’s money could be prevented. This step has been taken before the launch of the government’s digital platform EPFO 3.0, which will make PF services, especially withdrawal, and easier and easier.
Premature clearance conditions
EPFO members can withdraw money before time, but they need to fulfill certain conditions. For example, if you retire or remain unemployed for more than two months, you can remove funds. Partial withdrawal is valid for special reasons, such as buying, construction or repair, repayment of outstanding loans and medical emergency. On fulfilling the conditions of eligibility and maximum amount, the member will not have to submit any additional documents to take advance. In the event of resigning from the job, the member will have to wait for two months before withdrawing the amount of PF. If an account holder withdraws the entire amount of PF before completing 5 years of service, then both tax and TDS will be levied.
Also read- EPFO 3.0 Update: Facility to withdraw money from ATM by next year, read full details
Recovery process
According to the rules of the EPF scheme 1952, if a member uses his amount withdrawn for some other purpose, which was not mentioned at the time of withdrawal, the EPFO can recover that amount with interest. For example, if a member did a PF withdrawal house and later put it in some other work, it would be considered wrong. According to the EPF Scheme 1952 Rule 68B (11), where a clearance has been misused, there will be no new withdrawal for the next three years or until the entire recovery is with interest (whichever is later), that member will not accept any new withdrawal.