Now, withdraw up to Rs 1 lakh from your PF, even within 6 months of joining

If you’re looking to withdraw your provident fund for personal needs, there’s good news. The Employees’ Provident Fund Organisation (EPFO) has raised the withdrawal limit from Rs 50,000 to Rs 1 lakh.

"If you are an EPFO contributor and there's a family emergency, you can now withdraw a higher amount. The one-time withdrawal limit has been raised," said Union Labour and Employment Minister Mansukh Mandaviya at a press briefing on Tuesday.

What are the changes in withdrawal conditions?

Mandaviya also announced that the government has relaxed the rules, allowing people to withdraw within the first six months of a new job. "Previously, you had to wait longer, but now, PF contributors can withdraw even in the first six months... it’s their money," he said, adding that these updates were introduced within the first 100 days of the new government’s term.

 

The labour ministry has been working to improve EPFO's operations, introducing a new digital framework and updated guidelines to reduce the hassle for subscribers. One key change is that new employees can now withdraw funds without needing to wait six months, unlike the previous rules that restricted early access.

Why was the withdrawal limit raised?

The withdrawal limit was increased to reflect changing consumption patterns, with the previous cap of Rs 50,000 no longer sufficient to cover common expenses like medical treatments and weddings.

"People often rely on their EPFO savings for big expenses, and we've now enhanced the withdrawal limit to Rs 1 lakh at a time," Mandaviya said during the government’s 100 days in office event.

Provident funds are a crucial source of retirement income for over 10 million employees in the organised sector and are often the main savings option for many workers. The EPFO currently offers an interest rate of 8.25% for FY24, a figure closely watched by the middle class.

Will there be more changes to provident fund rules?

Mandaviya hinted at more updates coming soon, revealing that the government is planning to raise the income threshold for mandatory provident fund contributions. Currently, salaried employees earning up to Rs 15,000 must contribute, but this limit is set to increase. The income threshold for Employees’ State Insurance, now at Rs 21,000, will also be raised.

"For employees earning over Rs 15,000, we are introducing flexibility, allowing them to choose how much of their income they want to set aside for retirement and pension benefits," the minister added.

What is the current provident fund system?

Under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952, companies with 20 or more employees must contribute to provident funds. This involves deducting at least 12% of an employee’s salary, with the employer matching the contribution.

Here are the steps to withdraw PF:

1. Check eligibility

Emergencies such as medical treatment, education, or family needs are typically accepted by the Employee Provident Fund Organisation (EPFO).

2. Login to EPFO portal

Visit the EPFO Member e-SEWA Portal (https://unifiedportal-mem.epfindia.gov.in/memberinterface/) and log in using your UAN (Universal Account Number), password, and captcha.

3. Go to to the online claim section

Once logged in, go to the 'Online Services' tab and select 'Claim (Form-31, 19, 10C & 10D)' from the drop-down menu.

4. Verify details

Verify your personal details, such as name, date of birth, and other information, before proceeding. Make sure your Aadhaar is linked and KYC details are updated.

5. Submit claim

Select Form 31 for partial withdrawal (for emergency reasons) and choose the reason for withdrawal from the list (for example: medical treatment, education, etc.). Fill in the necessary details and upload any supporting documents, if required.

6. Authenticate with OTP

Once submitted, you will receive an OTP on your Aadhaar-linked mobile number. Enter this OTP to authenticate the claim.

7. Track claim status

After submission, you can track your claim status under the 'Track Claim Status' option in the 'Online Services' tab.

8. Receive funds

Upon approval, the funds will be transferred to your registered bank account within 7-10 working days.

These steps are for online withdrawal; however, you can also submit a physical form to the regional PF office if needed.