EPFO Rules: The Employees’ Provident Fund Organization (EPFO) has changed its withdrawal rules. Under the new rules, you can now withdraw up to 100% of your eligible provident fund balance, but you still need to exercise caution to prevent your retirement fund from being depleted. Let’s explore the benefits you can expect from the new EPFO rule.
The Employees’ Provident Fund (EPF) is a vital savings scheme for organized sector employees. Deposits can now be withdrawn prematurely. However, the 100% withdrawal provision and the 25% minimum balance requirement have caused some confusion. Under the new rules, employees can withdraw up to 100 percent of their eligible provident fund balance, which includes both employee and employer contributions. However, this is subject to conditions such as essential needs (illness, education, marriage), housing needs, and special circumstances.
According to Kunal Kabra, founder of Qustodian Life, if implemented as envisioned, it will give users easy access to their entire wealth, as partial withdrawals will be largely automated and require minimal scrutiny. Members will have to maintain a minimum balance of 25 per cent of their total contribution, on which they will continue to earn interest (currently 8.25 per cent) and compound interest.
25 percent will have to be kept in the account
Rajni Tandale, Senior Vice President, Finance (Mutual Funds), explained that for partial withdrawals or within the first 12 months after job loss, you must maintain 25 percent of your EPF balance in the account. She added that in cases of final settlement—such as retirement, permanent disability, or permanently leaving India, or being unemployed for 12 consecutive months—a subscriber can withdraw 100 percent of the amount.
Withdrawal for marriage and education
Customers can now withdraw funds up to 10 times for education and five times for marriage, compared to the previous limit of three. This provision will help families manage large living expenses without taking out personal or education loans. Rajni Tandle explained that previously, members had to provide reasons for withdrawals under special circumstances, such as natural disasters, lockdowns, or unemployment. This often resulted in applications being rejected. Now, no reason is required. Members can withdraw up to 75 percent of their funds even during unemployment under partial withdrawal, with the remaining 25 percent held for final settlement later.