Australian Provident Fund (EPF) is the main means of savings for employed people. Employers and employees contribute equal amount to this fund. The central government encourages employees to plan retirement through EPF. The EPFO deposits 12 percent of the basic salary of the employee and the company’s company also deposits 12 percent of his salary in the PF account in his name. Any employee can withdraw money from his PF funds during the Emergency. But some terms and conditions have been fixed for this.
At present, the government is paying interest at the rate of 8.15 percent on the amount deposited in the PF account. It is usually advised to withdraw the amount deposited in the PF account only after retirement. However, if necessary you can remove it before. But you may also have to pay tax.
Any employee can withdraw 90 percent of the money before his retirement. If an employee’s job goes away, then he can withdraw 75 percent amount from his PF account for the first time and the remaining amount for the second time.
The PF account holder can withdraw up to 50 percent of the employee’s share to meet his marriage or his son, daughter, brother or sister’s wedding. However, this provision will be applicable only after the completion of seven years of PF contribution.
The EPF account holder can withdraw money from PF account to treat himself or his family. The withdrawal amount is limited to the share of the employee, including six months of basic salary and dearness allowance or interest, whichever is low. Under Section 80C of the Income Tax Act, the tax deduction on the interest received on the money deposited in the EPF account can be claimed.
