Should I close my EPF account?

  • October 4, 2021
  • 4 minutes read

Employee Provident Fund (EPF) is one of the most useful method of savings that was introduced by the Government of India for its working population. Any organization that has over twenty employees offers PF to its employees. The employer and employee contribute towards the EPF account of the employee. 12% of the basic salary and Dearness Allowance (DA) components is contributed by the employee towards EPF account. This is when the salary of the employee (basic + DA) is less than Rs.15,000 per month. Employer contributes 12%, the same amount towards the employee’s EPF account but it is split into contributing 8.33% towards Employee’s Pension Scheme (EPS) and 3.67% towards Employee Provident Fund (EPF).  

Employee Provident Fund Organization (EPFO) offers an interest of 8.5% p.a. on the EPF funds of the accounts. The interest amount compounds over the years to a lump sum. Employees can use these funds for various purposes.  

Here’s when you can withdraw funds from your EPF account: 

  • Medical treatment 
  • Degree education 
  • Purchase or construction of residential property 
  • Repairs of a property 
  • Repayment of home loan 
  • To meet wedding expenses 

Medical treatment 

PF amounting up to 6 months’ salary can be withdrawn for medical treatment of the employee. There is no minimum period that the employee should have met in order to avail this benefit. Also, funds can be withdrawn for medical expenses any number of times from an EPF account. However, the employee can withdraw funds only for these three medical reasons- 

  • If the individual is suffering from any one of these ailments – cancer, tuberculosis, leprosy, heart ailments, paralysis and mental derangement. The individual should be on leave from his organization to get treated for any of these ailments. 
  • Employee undergoing a surgery in the hospital. 
  • Hospitalization of the employee exceeds one month period. 

Documents to be submitted to EPFO for withdrawal of funds for medical treatment: 

  • Duly filled Form 31 of EPF 
  • For surgery: Treating doctor should provide a medical certificate. 
  • For hopitalization of one month or more: Treating doctor should provide a medical certificate stating the reason of hospital stay, treatment planned and duration of stay. 
  • Certificate from employer stating that employer does not provide health insurance for the employee (or) certificate from Employee’ State Insurance Corporation (ESIC) stating that the ESI member (employee) is not eligible to receive any cash benefits from ESIC for medical treatment.   

Degree education 

If the employee’s siblings or children require funds to pursue education in college/university, the employee can withdraw funds from his/her EPF account. As per the EPFO rules, the employee must complete seven years of service to be eligible for utilizing the benefit of withdrawing EPF funds for education purposes.  

Purchase or construction of residential property 

To utilize EPF funds, an employee must fulfill the following criteria- 

  • The property should be dispute-free. 
  • The property should be registered and the documents should be submitted to the EPFO. 
  • Employee should complete 5 years of employment service with one organization. 
  • Property should be owned by the employee, employee’s spouse or jointly owned by the employee and his/her spouse. 

After the employee satisfies all the criteria mentioned above, the employee can apply for withdrawal of his EPF funds up to the limit of 24 times his/her monthly salary. 

Repairs of a property 

Employees can withdraw funds from EPF for repairs of a residential property that is occupied by the employee. It is to be noted that the employee can withdraw funds for repairs of a residential property only once in the lifetime of an EPF account. The employee must fulfill these criteria to apply for withdrawal from his/her EPF account. 

  • The residential property to be repaired must be in the name of employee/employee’s spouse/jointly owned by employee and spouse. 
  • Employee should complete 10 years of employment and hold EPF account, contribute towards his/her EPF account for 10 years. 
  • The residential property to be repaired must be over 5 years from the date of construction (as on the documents). 
  • Employee can withdraw a maximum of 12 times’ his/her monthly salary for repairs of a residential property.  

Repayment of home loan 

If an employee has an active home loan, he can utilize his PF funds for pre-payment of his home loan. It is to be noted that an employee can withdraw PF funds either for repayment of home loan or for repairs of residential property. If funds are already withdrawn for repairs of a house, then the employee is not eligible to withdraw funds for repayment of home loan and vice versa. Withdrawal for repayment of home loan can also be made only once in the lifetime of an employee. 

The employee should have completed ten years’ of service to be eligible for withdrawing towards repayment of home loan. The residential property must be in the employee’s name/employee’s spouse’s name/jointly owned by the employee & spouse. If the property is owned by any other individual or in any other relation jointly, the employee is not eligible to apply for repayment of home loan with EPFO. 

To meet wedding expenses 

If an employee has completed seven years of employment and contribution towards EPF, he/she is eligible to withdraw funds for wedding expenses. Funds can be withdrawn a maximum of three times in the lifetime of an employee towards own wedding, wedding of sibling and wedding of employee’s child.  

Withdrawal amounts can be calculated based on the employee contribution made towards EPF account in seven years or more and the interest accrued for it. You can get the details from your EPF account statement on your UAN account. You can also approach your nearest EPFO office in order to get details of the exact amount you are eligible to apply for withdrawal. 

When can I close my EPF account? 

You can close your Provident Fund account only in two circumstances – upon death of the individual or when the individual is unemployed.  

When the individual resumes employment with another organization, the new employer demands for the UAN number of the employee from his previous organization. This makes it unnecessary to close EPF account. Also, it is mandatory for the new employer to collect UAN number of newly joined employee from his/her previous employer. This has complicated the process of closing an EPF account.  

UAN number of an employee remains the same through the lifetime of the employee as it holds information of EPF account of the employee. Even if the employee works with several organizations in his lifetime, member IDs are created for the employee, but these member IDs come under the umbrella of the UAN number.  

It is very important for employees to maintain their UAN number as it is mandatory for withdrawal, and claims.  

You can read all about UAN number and its uses here. 


You can utilize your hard-earned money deposited in your EPF account as and when need arises. You only have to satisfy the basic criteria given by the EPFO based on the withdrawal purpose. When you can earn a handsome 8.5% p.a. on your EPF account and utilize it for so many reasons throughout the lifetime why close your EPF account? Continue to contribute towards it and enjoy the benefits it brings. If you have any questions on EPF – withdrawal, usage of UAN number of EPF account or home loan, feel free to post it in the comments section below the blog and we’ll attend to you. 

Written by: Marketing Fincity

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