EPFO Rule: EPFO has changed the withdrawal rules, 30% tax may have to be paid, know the new rule
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The amount deposited in PF is a great support for the employees working in the organized sector . Employees withdraw money from their PF account when needed. The Employees Provident Fund Organization (EPFO) provides the facility of withdrawing money for different needs.
Let us tell you that the main objective of the EPF scheme is to financially secure the post-retirement life of workers working in the organized sector through assured retirement fund and pension. However, employees can withdraw money partially or fully from their EPF account even before the scheme matures. However, recently EPFO has changed the withdrawal rule. After this the tax burden has increased. Let us know what is the new rule of EPFO?
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New EPF Withdrawal Rules 2024
nder normal circumstances, if you continue to do a regular job without any break or gap, you cannot withdraw provident fund before retirement. However, partial withdrawal of funds is allowed under certain circumstances, such as medical emergencies, higher education and buying or constructing a house. If an employee loses his job, he can withdraw 75% of the EPF after one month of unemployment and the entire 100% after two months. But for this, the employee has to declare unemployment.
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When will we have to pay 30% tax on withdrawal
For partial or full tax-free withdrawal of PF funds, it is mandatory that the PF subscriber has completed 5 years of contribution under the EPFO scheme. However, if the withdrawal amount is less than Rs 50,000, no tax is payable. If the EPF withdrawal amount exceeds Rs 50,000 within five years of opening the account, the EPF subscriber will have to pay TDS of 10%, provided he has a PAN card. Without a PAN, this tax liability becomes 30%.
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