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Provident Fund Premature Withdrawal

 
 

Provident Fund Premature Withdrawal

Every month salaried employees keep on depositing small part of money in provident fund. Normally it is advised that best use of PF money is post retirement and it should be withdrawn only after the retirement. But if you are stuck in some family emergencies or need money on an urgent basis then withdrawal of provident fund money before maturity can be done. Here are few scenarios when you can withdraw PF money before maturity and conditions under which you can withdraw:

  • Education or marriage
  • Buying land
  • Building flat or house
  • Repayment of home loan
  • Medical emergencies

Conditions for Early Withdrawal for Education or Marriage:

  • Minimum 7 years of employment is over
  • Marriage of your siblings – for this you need to provide verification documents such as marriage card
  • For verifying education of your kids you need to provide  education fees document

HOW MUCH MONEY YOU CAN WITHDRAW:

  • Only half of the provident fund money can be available during the withdrawal date can be taken out
  • Only 3 times during your whole employment, money can be withdrawn

Conditions for Buying Plot Using PF Money:

  • Minimum 5 years of employment is over
  • The plot which you are going to buy should be on your name or your partner's name or must be jointly registered

WITHDRAWAL LIMIT:

  • You can withdraw 24 times of your monthly salary at the time of withdrawal.
  • Only 1 time during your employment you can withdraw the money before maturity

Conditions of Withdrawing for Flat / House:

  • Conditions are similar as mentioned above for buying plot

WITHDRAWAL LIMIT:

  • You can withdraw 36 times of your monthly salary at the time of withdrawal.
  • Only 1 time during your employment you can withdraw this money before maturity

Conditions for Using Provident Fund Money for Repayment of Home Loan:

  • Minimum 5 years of employment is over
  • The plot which you are going to repay home loan; that flat or house should be on your name or your partner's name or must be jointly registered

WITHDRAWAL LIMIT:

  • Limits and conditions are similar to that applied for flat or house as mentioned above

Withdrawing PF Money for Medical Expenses:

  • For expenses of you, your partner/children/parents
  • No minimum employment year limit
  • Proof of hospitalization or leaves taken during that period should be submitted
  • ESI – the certificate given by your employer which states that employee is not receiving benefits of ESI must be given as a proof

WITHDRAWAL LIMIT:

  • 6 times of your monthly salary and total money deposited in the PF whichever is lower of these two can be withdrawn
  • You can withdraw the money before maturity unlimited times

IS PREMATURELY WITHDRAWN PROVIDENT FUND MONEY TAXABLE?

Yes, it is taxable provided money is withdrawn within 5 years of your employment. If money is withdrawn after 5 years of employment then it is not taxable.

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