Government approves 100% EPF withdrawal, consolidates 13 rules into 3

The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has eased withdrawal rules, allowing members to withdraw up to 100% of their eligible balance, including both employee and employer contributions. Labour Minister Mansukh Mandaviya approved the changes, the Labour Ministry said in an official release.

According to the ministry, 13 existing provisions for partial withdrawals have been consolidated into three categories: essential needs such as education, illness and marriage; housing needs; and special circumstances such as unemployment or natural calamities.

The revised norms raise the limit on withdrawals for education to ten times and for marriage to five times, compared with the earlier cap of three.

A uniform 12-month minimum service requirement has been set for all partial withdrawals, replacing varied thresholds under earlier rules.

Simplified procedures

The ministry stated that members will no longer need to cite specific reasons for withdrawals under the “special circumstances” category, which previously required details such as natural disasters, epidemics, or factory closures. This change is aimed at reducing claim rejections.

At the same time, members must retain at least 25% of contributions as a minimum balance to continue earning interest, which is currently 8.25% per annum, the ministry said.

Settlement timelines extended

The board also approved changes to settlement windows. Members can now make premature final withdrawals from EPF after 12 months of service, compared with two months earlier. Pension withdrawals will be permitted after 36 months, up from two months under earlier rules.

Penalty scheme for delayed payments

The ministry noted that as of May 2025, penal damages on delayed provident fund remittances amounted to ₹2,406 crore across more than 6,000 cases. To address this, the EPFO introduced the Vishwas Scheme, which sets damages at a uniform 1% per month, with lower graded rates for delays of up to four months.