The Central Board of Trustees (CBT) has approved a proposal to make partial and full withdrawal of funds from the Employees Provident Fund (EPF) much easier.
As per the new proposal, account holders will be able to withdraw 100% of their funds from their EPF. This will benefit over 7 crore subscribers.
As per the Labour Ministry, CBT decided to merge 13 complex provisions into a single, streamlined rule categorised into three types, namely, essential needs (illness, education, marriage), housing needs and special circumstances. This made partial withdrawal provisions of the EPF scheme much easier.
“Members will be able to withdraw up to 100 per cent of the eligible balance in the Provident Fund, including the employee and employer share,” the ministry stated.
Additionally, education withdrawals were allowed up to 10 times and marriage up to 5 times. Earlier, only three partial withdrawals were allowed for both cases. The requirement of minimum service has also been reduced to only 12 months for all partial withdrawals.
Prior to the new proposal, under ‘Special Circumstances,’ the member was required to clarify the reasons for partial withdrawals, such as natural calamities, lockouts/closure of establishments, continuous unemployment, or outbreaks of epidemics. This often led to rejection of claims and consequent grievances.
“The member can apply without assigning any reasons under this category,” the ministry emphasised. A provision has also been made to earmark 25 per cent of contributions in the members’ account as a Minimum Balance to be maintained by the member at all times.
The ministry believes that simplification, along with greater flexibility and the elimination of any documentation, will pave the way for 100 per cent auto-settlement of claims for partial withdrawals and ensure ease of living. The period for availing premature final settlement of EPF has also been changed from 2 months to 12 months, and the period for final pension withdrawal has been changed from 2 months to 36 months.
“The liberalisation of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements,” the statement added.
The Employees Provident Fund Organisation (EPFO) has also rolled out the “Vishwas Scheme” to reduce litigation through rationalised penal damages.
The ministry cited the imposition of damages for belated remittances of PF dues as one of the major reasons for litigation. As of May 2025, outstanding penal damages stand at ₹2,406 crore, with over 6,000 cases pending across forums, including High Courts, CGITs and the Supreme Court. Further, nearly 21,000 potential litigation cases are pending under EPFO’s e-proceedings portal.
“Under the Vishwas Scheme, the rate of penal damages will be reduced to a flat rate of 1 per cent per month, except for a graded rate of 0.25 per cent for default up to 2 months and 0.50 per cent for default up to 4 months. The scheme shall remain in operation for six months and is extendable by another six months,” the ministry clarified in its statement.
