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News Topical, Digital Desk : The Employees Provident Fund Organisation (EPFO) has taken a major decision for its over 7 crore members. Now, EPFO members will be able to withdraw 100% of their PF account if needed (100% PF withdrawal). The government has described this step as a major improvement towards making people's lives easier. This major decision was taken in a meeting chaired by Labour Minister Mansukh Mandaviya. Now, withdrawing money for needs like education, marriage, illness or house has become easier and hassle-free. This change will increase both the financial freedom and convenience of crores of employees.
13 rules consolidated into just 3 categories
In a meeting held on Monday, the EPFO's Central Board of Trustees (CBT), chaired by Labor Minister Mansukh Mandaviya, approved several key decisions. The most significant change is that the rules for partial withdrawals from EPF have been completely simplified and made flexible. Previously, there were 13 separate and complex rules, which have now been consolidated into three categories:
1. Essential needs such as illness, education and marriage
2. Housing Needs
3. Special circumstances.
Partial withdrawal period reduced to 12 months
Employees will now be able to withdraw 100% of their account balance, including both the employee and employer portions. Withdrawal limits have been increased to 10 times for education and 5 times for marriage. Previously, only three withdrawals were permitted. Previously, a minimum of five years of service was required for any partial withdrawal, but this has now been reduced to just 12 months.
25% of the amount will remain as "Minimum Balance"
Previously, in cases of "special circumstances," members were required to provide a reason—such as a natural disaster, pandemic, unemployment, or lockdown. This resulted in many claims being rejected. Now, withdrawals in this category can be made without providing a reason. The EPFO has also decided that 25% of the funds will always remain in the member's account as a "minimum balance," allowing them to earn 8.25% interest and the benefit of compounding. This means that they will retain the freedom to withdraw funds when needed, while also maintaining the benefits of their retirement funds.
Vishwas Scheme was also approved in the meeting.
EPFO says that now 100% of partial withdrawal claims will be settled automatically, that too without any documentation. Furthermore, the final settlement rules have also been changed – now premature settlement of PF can be done in 12 months instead of 2 months, and pension withdrawal can be done in 36 months instead of 2 months. The meeting also approved the "Vishwas Scheme", which aims to reduce litigation in penalty cases. Now the penalty on late PF deposits will be only 1% per month.
According to the Ministry of Labor, as of May 2025, penalties worth ₹2,406 crore are pending in such cases, and more than 6,000 cases are pending in courts. This scheme will run for six months and can be extended by another six months if needed. EPFO has partnered with India Post Payments Bank (IPPB) to provide digital life certificates to EPS-95 pensioners at their homes. Pensioners will not have to pay any fee for this.
"Crores of employees will get direct benefit"
The meeting also approved the "EPFO 3.0 Digital Framework," which will make PF services fully digital and automated, similar to banking. This will include multilingual self-service, instant claims, and online withdrawals. The CBT also approved the appointment of four new fund managers to manage the PF's debt portfolio, ensuring better returns on investment. Labor Minister Mandaviya said these decisions will make EPFO services transparent, faster, and technology-based, directly benefiting millions of employees.
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