The Central Board of Trustees (CBT) of the Employee Provident Fund Organisation (EPFO) approved a proposal on Monday that eases partial withdrawals – of up to 100 per cent – from the Employees Provident Fund (EPF).
The move will benefit over seven crore subscribers, according to a statement released by the Labour Ministry. “The liberalisation of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements,” it stated.
The meeting on Monday was headed by Union Labour Minister, Mansukh Mandaviya, and included approval of liberalised part withdrawals that includes employee and employer share.
“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 statement further read.
Thirteen complex provisions have been merged into one streamlined rule that is categorised into three types: essential needs (which includes illness, education, marriage), housing needs, and special circumstances.
Also Read: EPFO sees record 20 lakh net additions in May 2025
While earlier, under ‘Special Circumstances’, a member was required to clarify the reasons for partial withdrawals with regards to continuous unemployment, epidemic, natural calamity, or closures of establishments, which led to rejection of claims, members can now apply without assigning any reason under this category.
Key highlights
With withdrawal limits relaxed, education withdrawals have been allowed up to 10 times and marriage up to 5 times from the existing limit of a total of 3 partial withdrawals for marriage and education included.
The requirement of minimum service has now been uniformly reduced to only 12 months from the existing 2 months for all partial withdrawals. The period for availing final pension withdrawal has also been changed from the existing 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.
Further, a provision has been made for earmarking 25 per cent of the contributions in the members’ account as ‘Minimum Balance’ to be maintained by the member at all times.
The EPFO has also rolled out the ‘Vishwas Scheme’ to reduce litigation through rationalised penal damages. 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, said the ministry.
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 statement added.
The Central Board has also approved the selection of four Fund Managers for managing the debt portfolio of EPFO for a period of five years to help safeguard and enhance returns on members’ provident fund savings in line with the organisation’s long-term investment objective.
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