Kolkata: A significant liberalised process of early withdrawals has been approved by the EPFO (Employees Provident Fund Organisation) board on October 13, pacing the way for a smooth process of early withdrawal. The Central Board of Trustees of the retirement funds body, which is chaired by Union labour Minister Mansukh Mandaviya, took this decision along with a few others on Monday. EPFO has more than seven crore members.
The early withdrawal rules of EPF were complex. The EPFO board merged them into a single rule labelling the needs for early withdrawals into three categories — essential Needs which will have instances such as treatment of any illness, education and marriage expenses); housing needs and special circumstances. If needed, a EPFO subscriber can withdraw up to 100% of the eligible balance in the EPF which will consist of contributions from both the employee and the employer.
Withdrawal limits and eligibility
The EPFO will henceforth allow withdrawals for education up to 10 times and marriage up to 5 times from the current limit of a total of three part withdrawals for marriage and education. The minimum period of service that is needed for part withdrawals has been reduced to just 12 months for all cases.
Another significant change has been the ‘Special Circumstances’ category. Earlier the applicant had to clearly state the reasons for part withdrawal such as natural calamity or lockout/closure of company, epidemic outbreak. Now an EPFO the member can apply for ‘Special Circumstances’ without detailing any reason.
Minimum balance requirements
However, a new provision has been made for retaining 25% of the contributions in the EPFO member account as minimum balance to be maintained always. This, the government said, will allow the subscriber to earn a significant rate of interest that EPFO pays every year (8.25% in the past two years).
The easing of partial withdrawals will ensure that EPFO subscriber can meet emergency financial needs. The EPFO has also set in motion the ‘Vishwas Scheme’ to cut down in litigations. The labour ministry said that imposition of damages for belated remittances of PF dues was one of the reasons for litigations by companies. In May 2025, the penal damages stood at Rs 2,406 crores and more than 6,000 cases were pending including high courts and the Supreme Court. The EPFO’s e-proceedings portal also displays about 21,000 potential litigation cases.
The Vishwas Scheme will cut down the penal damages to flat 1% per month. There is a graded approach to defaults — 0.25% for default up to two months and 0.50% for default up to four months. The Vishwas Scheme will remain applicable for six months and extendable by another six months.
The EPFO Board has also approved the process to offer doorstep Digital Life Certificate (DLC) services to EPS’95 pensioners at a cost of Rs 50 per certificate in association with the Indian department of posts. It could help pensioners in rural and remote areas to submit life certificates from home through IPPB network.
Fund managers
The EPFO board has also approved the selection of four fund managers. They will manage the debt portfolio of EPFO for the next five years. These funds are SBI Funds Management Limited, HDFC AMC Limited, Aditya Birla Sun Life AMC Limited, and UTI AMC Limited.