You can now withdraw your entire PF balance anytime
What's the story
The Employees' Provident Fund Organisation (EPFO) has made a major decision to improve the 'ease of living' for its members. The EPFO's Central Board of Trustees (CBT) has decided that members can now withdraw up to 100% of their eligible balance in the Provident Fund (PF) account. This includes both employee and employer contributions. The decision was taken during the CBT's 238th meeting in New Delhi, chaired by Union Minister for Labour and Employment Mansukh Mandaviya.
Rule changes
Major changes in withdrawal rules
Previously, full withdrawal from the PF account was only allowed in cases of unemployment or retirement. Now, members can withdraw up to 100% of their eligible balance under liberalized rules, with specific conditions or categories that may still apply. The CBT has also simplified partial withdrawal provisions by merging 13 complex rules into one. This new rule is divided into three categories: essential needs (illness, education, marriage), housing needs and special circumstances.
Flexibility increase
Increased limits for education and marriage withdrawals
The CBT has also increased withdrawal limits for education and marriage. Now, withdrawals for education are allowed up to 10 times while those for marriage can be made up to five times. The minimum service requirement for all partial withdrawals has been uniformly reduced to just 12 months. This is a significant reduction from the previous rules, which required members to explain their reasons for partial withdrawals under 'Special Circumstances,' often leading to rejection of claims.
Member benefits
Minimum balance requirement and auto-settlement of claims
The CBT has introduced a new provision for maintaining a 'Minimum Balance' of 25% of contributions in members' accounts at all times. This will allow members to enjoy the high interest rate offered by EPFO (currently 8.25% per annum) along with compounding benefits to build a substantial retirement corpus. The board also announced that there would be "zero need for any documentation" paving the way for 100% auto settlement of claims for partial withdrawal.