EPFO New Withdrawl Rule- Employee Provident Fund (EPF) is created to secure your retirement. However, sometimes sudden expenses arise which have to be met immediately. The Employees’ Provident Fund Organization (EPFO) allows subscribers to withdraw money from their Provident Fund (PF) account under certain circumstances.

However, financial experts believe that this option should be used as little as possible as it reduces the fund available on retirement.

What is EPF and how much do you contribute?

EPF is a mandatory saving scheme. This amount keeps accumulating along with interest till retirement. The employee can withdraw it on retirement or in case of emergency. Private sector employees who are enrolled in EPF contribute 12 per cent of their basic salary and dearness allowance (DA) every month. Employers also contribute the same amount. The interest rate has been fixed at 8.25 per cent for the financial year 2024-25. According to EPFO, there are mainly three types of withdrawals.

The first is final settlement. In this, the entire money is withdrawn after retirement.

The second is partial withdrawal. Members can withdraw it for special needs.

The third is pension withdrawal benefit. This is for eligible members under the Employees’ Pension Scheme.

When can you withdraw PF money?

EPFO allows PF withdrawal in certain situations. However, if you have withdrawn PF for the wrong reason, then EPFO can also recover it from you.

Unemployment: If you remain unemployed for more than a month, you can withdraw 75% of the balance. The entire amount can also be withdrawn if you remain unemployed for two months.

Home and land needs: After three years of membership, you can withdraw up to 90% of your PF savings to buy or construct a house. This amount can also be used to repay a home loan, subject to certain conditions.

Medical Emergency: You can withdraw up to six months of your basic salary and DA or your own contribution amount (including interest), whichever is lower, for yourself or dependents.

Marriage or education: After seven years of service, you can withdraw up to 50% of your contribution amount (including interest). This amount can be used for the child’s education above Class 10 or for marriage expenses.

Special cases: If the employer has closed the establishment or has delayed payment of salary for more than two months, the advance can be taken.

How to do EPF withdrawal?

Members can make withdrawal online using their UAN on the EPFO portal, or can also apply through offline composite claim form (Aadhaar or non-Aadhaar).

While EPF withdrawals can be helpful in emergencies or big expenses, financial experts repeatedly warn against using them. Every withdrawal reduces your retirement savings, money that can grow over the long term through compound interest.