While this flexibility is a great relief during critical times, it’s important to understand the rules, limits, tax implications, and the overall impact of such withdrawals on long-term financial security.
EPF withdrawal for marriage and higher education
To access EPF funds for marriage or higher education, the rules are quite strict. Sanjay Kesari, former regional commissioner of Provident Fund, highlighted a crucial requirement—an employee must have been a member of the EPF for at least seven years.
“Your date of joining should be at least seven years back,” said Kesari, adding that this is a non-negotiable condition for eligibility. Additionally, Anshul Prakash, partner at law firm Khaitan & Co., said an employee must have at least ₹1,000 in their EPF account to qualify for such withdrawals.
When it comes to withdrawal limits, employees can access up to 50% of their own contribution, including interest. The combined limit for withdrawals for both marriage and higher education is three times throughout an employee’s lifetime.
If an employee has already used one of their withdrawals for marriage, they may only use one more for either marriage or higher education. Marriage can be for self, sibling, or child, while withdrawals for higher education can only be for a son or daughter.
Kesari warned that employees should use these withdrawals sparingly, as frequent access to the EPF could erode long-term retirement savings.
Employees can apply for such withdrawals through the EPFO portal. For amounts up to ₹1 lakh, the claims can be processed in 3-4 days through the E-Seva portal. While these withdrawals are tax-free, If the EPF account is settled within 5 years of membership or employment and the amount exceeds ₹50,000, it may be taxable, Kesari said.
Also read | Govt likely to increase EPFO claim limit from ₹1 lakh to ₹5 lakh: Report
EPF withdrawal for medical expenses
“A member can withdraw for medical reasons even shortly after joining,” Prakash said. Unlike EPF withdrawals for marriage and higher education, withdrawals for medical reasons can be availed multiple times.
“When it comes to the amount that can be withdrawn it is the least of the following: six months’ basic salary plus dearness allowance, the available EPF balance, or the applied amount,” said Kesari.
The processing time for such withdrawals is typically 7-10 days. If the requested amount is less than ₹1 lakh, the claim is auto-approved.
How to withdraw from EPF?
For an online withdrawal from your EPF account, log in to www.epfindia.gov.in. Navigate to the ‘Claim’ section under the UAN menu, select ‘Request for Advance’, choose the appropriate withdrawal reason, and submit your request. You can track the claim status online, and in some cases, you may need to upload a scanned copy of a cheque leaf for verification.
For an offline withdrawal, visit your local EPFO office with the required documents and submit a physical withdrawal form. The processing may take up to 20 days to complete.
EPF withdrawals do not need to be repaid, as these are not considered a loan. Additionally, there is no loan facility against EPF balances.
Also read | How to withdraw VPF for home purchase, loan repayment
What members need to keep in mind
According to Prakash, the online application process through the EPFO website has significantly reduced processing times, especially for claims under ₹1 lakh. What used to take 10-15 days for a physical claim can now be completed in 3-4 days.
However, even with the online convenience, it is crucial to have all necessary documentation ready. For larger withdrawals, employees may need to provide additional proof, such as educational certificates or medical documentation.
“Planning is equally important when considering a withdrawal. It’s vital to understand the limits and rules for each type of withdrawal to avoid missing out on future opportunities.” said Prakash. “For instance, marriage and education withdrawals are limited to three uses, while medical withdrawals can be accessed multiple times. But it’s essential to use this feature wisely.”
Moreover, members should keep their EPF account details, including bank account information, up-to-date. EPFO requires that the name on the bank account matches the name in the EPF records. Mistakes here can cause delays or even rejection of the application. Having accurate KYC (know-your-customer, or customer verification) details is another prerequisite to ensure that the withdrawal process is smooth.
Also read | Need funds but locked in NPS? Here’s how you can make partial withdrawals
Balancing your needs
While it’s tempting to tap into your EPF savings during financial crunches, Kesari cautioned against frequent withdrawals. “EPF is primarily for old-age security, not frequent withdrawals,” he said, emphasizing the long-term nature of the fund.
In EPF withdrawals for marriage, education or medical purposes, the amount is paid only from the employees share of the PF.
Withdrawals should be made with careful consideration of their impact on future financial security. Employees should also be mindful of tax implications, especially when withdrawing large amounts or accessing the EPF before five years of service.
While EPF provides an essential safety net for marriage, education, and medical expenses, it should not be seen as a go-to resource for immediate financial relief. Balancing short-term needs with long-term financial security is key to making the most of the EPF’s provisions.
