EPFO: Big news for EPFO members. Providing a false reason for withdrawing from the EPFO can be quite expensive. The EPFO has recently issued a stern warning to its subscribers, advising them against the misuse of PF advances. If a member is found to be in violation of the rules, the EPFO will not only reclaim the funds but also impose a hefty penalty.

Withdrawing funds under false pretenses can be costly

The EPFO has made it clear on its official ‘X’ (Twitter) account that PF money can only be withdrawn for specific reasons (such as illness, marriage, education, or house construction). If a member withdraws money under the false pretense of illness or marriage and it is later discovered to be untrue during an investigation, the EPFO will take steps to recover that amount along with interest.

According to the EPF Scheme of 1952, the EPFO has the authority to impose penal interest on incorrectly withdrawn funds. This interest rate can be significantly higher than the standard PF interest. The most severe penalty is a three-year ban on future withdrawals. If you are found to be withdrawing money using false information, you will be prohibited from making any advance withdrawals from your PF account for the next three years. Alternatively, your withdrawals will be suspended until you repay the entire amount withdrawn, plus interest.

With the launch of EPFO 3.0 in 2026, monitoring of PF accounts has become completely digital and AI-based. Aadhaar, PAN, and bank account matching during online claims are now done in real-time. The system automatically flags accounts with suspicious transactions or frequent advance withdrawals.

Pay special attention to these things

Consider PF as your retirement savings, withdraw it only in case of emergencies like illness, education, marriage, house etc. Although there’s less need to upload documents for advances now, you may need to show proof of expenses, such as a hospital bill or wedding card, during a future audit. If you’ve been employed for less than five years and are withdrawing more than 50,000, be sure to provide your PAN, or you could face a tax deduction of up to 34.6%.

About the Author

Sweta Mitra

Working in the media for last 7 years. The journey started in the year 2018. For the past few years, my working experience has been in Bengali media. Currently working at Timesbull.com. Here I write like Business, National, and Utility News. My favorite hobbies are listening to music, traveling, food,...

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