The Employees Provident Fund Organisation (EPFO) gives workers in India the ability to create a nest egg for their retirement. The EPFO consists of monthly contributions by both the employee and employer, which are later available once the worker retires. There are certain conditions given by the fund for partial withdrawal before retirement. One of these conditions is unemployment. If an EPFO member is unemployed, they can withdraw money from the account if some conditions are met.
The withdrawal in this case can amount to the entire sum present in the PF account of the employee. Here is everything you need to know about the rules around PF withdrawal in case of unemployment.
EPFO: What Happens To The Money If You Are Not Working?
If you lose your job, the amount in your PF account will continue to accumulate interest. There will be no new contributions into the account until you find a new job and get the paperwork done for the PF contributions. Employees need to get their PF account transferred to their new place of work for the contributions to begin again.
Employees can withdraw their entire PF amount two months after their resignation from a job if they are still unemployed. Alternatively, you can take up to 75 per cent of the amount after one month of unemployment and withdraw the remaining money later. To be eligible for the withdrawal, certain conditions must be fulfilled.
The person must have served a notice period of one month or paid the amount corresponding to that time to their employer.
Their details are up to date on the EPFO portal.
They have not joined another job.
EPFO: How To Withdraw PF In Case Of Unemployment?
Employees can start the process either online or offline. To start the withdrawal, they need to deposit the Composite Claim Form (Aadhaar)/Composite Claim Form (non-Aadhaar). Alternatively, they can start the process on the EPFO portal.
In certain cases, a partial PF withdrawal is allowed in cases of marriage, buying a loan or educational purposes if the employee has been working for a certain number of years.
It needs to be noted that PF is the major source of retirement funds for a lot of employees. Withdrawing the funds may leave you with less savings for the future. Multiple PF withdrawals could result in financial instability in the long run. If you are planning to take some funds out of your PF account, do consider alternatives to preserve your retirement savings.
. Read more on Personal Finance by NDTV Profit.If you lose your job, the amount in your PF account will continue to accumulate interest. Read MorePersonal Finance
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