NEW DELHI: The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has relaxed the rules for partial withdrawals from EPF accounts, allowing members to withdraw up to 100% of their eligible balances including both employee and employer share.
Labour Minister Mansukh Mandaviya approved the decision of consolidating 13 existing withdrawal provisions into three broad categories -- essential needs (education, illness, marriage), housing needs, and special circumstances (such as natural calamities or unemployment). Under these revisions, withdrawals for education can be made up to ten times, and for marriage up to five times, replacing the earlier cap of three.
“Now, members will be able to withdraw up to 100% of the eligible balance in the Provident Fund including employee and employer share,” the ministry stated in the release issued.
A uniform 12-month minimum service requirement has now been prescribed for all partial withdrawals, eliminating varied thresholds under different categories.
Previously, EPFO members seeking partial withdrawals under the ‘Special Circumstances’ category had to specify reasons such as a natural calamity, factory closure, prolonged unemployment, or an epidemic. This procedural requirement often resulted in claim rejections and related grievances. Under the revised rules, members can now make such withdrawals without having to cite any specific reason, simplifying the process and reducing the scope for disputes.
To safeguard retirement savings, the EPFO has also mandated that at least 25% of one’s contributions needs to be there as a minimum balance. This ensures that members continue to benefit from EPFO’s interest rates (currently 8.25 % per annum) with compounding.
Other decisions at the meeting included extending the final settlement window. Members can now make premature final EPF withdrawals after 12 months (against two months earlier), and pension withdrawals after 36 months (against two months). A major source of litigation for the EPFO has been the steep penal damages on delayed provident fund remittances, which totalled ₹2,406 crore across over 6,000 cases as of May 2025. To ease the burden, a new Vishwas Scheme has been introduced to cut penalties to a uniform 1% per month, with lower graded rates for delays of up to four months.
