Overview of the New PF Withdrawal Rules
The Employees' Provident Fund Organisation (EPFO) has simplified its partial withdrawal rules for provident fund (PF) balance. Now, as per the new scheme, the subscribers can withdraw 100% of their qualifying PF balance, including both employee and employer's contribution.
These amendments were approved by the Central Board of Trustees (CBT), chaired by Union Labour Minister Mansukh Mandaviya. The step is expected to benefit over seven crore EPFO members in India.
Key Streamlining of Withdrawal Rules
The CBT replaced 13 various withdrawal rules with one simple rule. Withdrawals are now grouped into three simple categories:
- Essential Needs: On account of illness, education, or marriage.
- Family Needs: For personal or family purposes.
- Special Circumstances: For special circumstances such as loss of employment or natural calamities.
Altered Withdrawal Limits
Partial withdrawal limits have been increased. Members are now:
- Allowed to withdraw 10 times for the cost of education.
- Allowed to withdraw 5 times for the cost of marriage.
- Both were allowed earlier, but only up to 3 times.
- Lowered Service Requirement
Minimum service time for any partial withdrawal has been reduced from the earlier requirement of 12 months for all categories.
Flexible Withdrawals Under Special Circumstances
Withdrawals in earlier exceptional cases such as unemployment, natural disaster, or firm closure were to be explained. EPFO now makes requests without reasons being explicitly stated.
Minimum Balance
A new rule requires members to hold a minimum balance of 25% of the total amount deposited in their PF account. In this manner, the account continues to earn the current rate of interest of 8.25% and contributes toward supporting long-term retirement benefits.
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