EPF Akaun Sejahtera (formerly Account 2): Withdrawal Purposes and Tax Treatment

Introduction

KWSP's Akaun Sejahtera (formerly known as Account 2, from 11 May 2024) is reserved for pre-retirement needs. This article explains the permitted withdrawal purposes, the main conditions for several categories, and the tax treatment of EPF withdrawals.

What is Akaun Sejahtera?

• Akaun Sejahtera (formerly known as Account 2, from 11 May 2024) is reserved for pre-retirement needs.
• Withdrawals are only permitted for specified purposes:
• Housing
• Education
• Health
• Insurance/Takaful Protection (i-Lindung)
• Haj
• Age 50 Withdrawal
• Most categories require the member to be below age 55 (subsection 55A(2) of the EPF Act 1991).

Housing withdrawals: 6 types

Housing withdrawals consist of 6 types: Buy a House; Build a House; Monthly Instalments; Reduce/Settle Loan Balance; Flexible; PR1MA.

For Buy a House:

• Below age 55.
• Minimum balance RM500.
• Formula of price/10% or full balance (whichever is lower).
• Limited to 2 houses in a lifetime.

Education withdrawals

• Self/spouse/child/parents (from 1 May 2021).
• Level: Certificate Level 3, diploma and above.
• Fully sponsored members are not eligible.
• Amount = fees/loan balance or full balance (whichever is lower).

Tax treatment

KWSP is an approved scheme; EPF withdrawals and dividends are not subject to income tax (Schedule 6 of the ACP 1967).

FAQ

Q. What is Akaun Sejahtera? A. An EPF account (formerly known as Account 2, from 11 May 2024) reserved for pre-retirement needs.

Q. What withdrawal purposes are permitted? A. Housing, Education, Health, Insurance/Takaful Protection (i-Lindung), Haj, and Age 50 Withdrawal.

Q. Are EPF withdrawals taxable? A. No — KWSP is an approved scheme; EPF withdrawals and dividends are not subject to income tax (Schedule 6 of the ACP 1967).