EPF withdrawal limits: The government has also removed the requirement to provide justification for the purpose of partial withdrawals.
To enhance ease of living of EPF members, the Employees’ Provident Fund Organisation (EPFO) decided to simplify the partial withdrawal provisions of EPF scheme by merging 13 complex provisions into a single. With this, members will be able to withdraw upto 100% of the eligible balance in the Provident Fund, including employee and employer share.
100% withdrawal limit increased
Employees’ Provident Fund Organisation (EPFO) members will now be able to withdraw up to 100 per cent of their entire eligible balance, which includes both employee and employer contributions. Under earlier rules, members could withdraw their whole PF amount only in case of unemployment or retirement. At that time, members could withdraw up to 75 per cent of their PF balance one month after joining a job, and the remaining 15 per cent two months after leaving a job. Now, as per the new rules, the period for withdrawing the entire amount in case of unemployment has been increased from 2 months to 12 months. Furthermore, in case of retirement, this period has been increased from 2 months to 36 months. This change will enable EPF members to benefit from their provident fund fully.
Complex Withdrawal Provisions Simplified
The CBT has removed 13 complex partial withdrawal provisions and consolidated them into a single, streamlined rule. These rules are now broadly classified into three categories: Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances.
Relaxation in withdrawal limits for education and marriage
Previously, there was a total limit of 3 partial withdrawals for marriage and education. Now, the withdrawal limit for marriage has been increased to 5 times. Similarly, the withdrawal limit for purposes such as education has also been liberalised to 10 times.
The need to provide justification has been removed
The government has also removed the requirement to justify the purpose of partial withdrawals. This is a significant relief, as previously, under “special circumstances” (such as natural disasters, lockouts/closures of establishments, pandemics, etc.), a reason was required, which often led to rejections of requests. This requirement has now been removed.
Minimum Balance Provision
A new provision has been added that requires members to maintain a minimum balance of 25 per cent of their contributions in their accounts at all times. This will ensure that members can accumulate a high-value retirement fund by taking advantage of the high interest rate offered by EPFO (currently 8.25 per cent per annum) as well as the compounding benefit. These changes will provide EPF members with greater flexibility and convenience in accessing their funds during financial emergencies.
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