EPFO eases rules: 75% of PF corpus withdrawable after one year of service

The Employees' Provident Fund Organisation (EPFO) has made the process of withdrawing money from PF much simpler than before. Until now the withdrawal process was complicated, but employees will now be able to withdraw money quickly in times of need.

Sudden illness at home, children's school fees or a wedding in the family are occasions when people often lack ready cash, and PF money comes in useful at such times. Keeping this in mind, EPFO has relaxed its rules.

Under the new rules, an employee can withdraw an advance from PF once they complete 12 months, or one year, of service at a company. Earlier, employees had to wait much longer for this. A PF account holds both the employee's contribution and the employer's contribution, along with the interest earned on them. Up to 75% of this total accumulated amount can be withdrawn as an advance. So if someone has Rs 4 lakh in their account, they can withdraw up to Rs 3 lakh.

EPFO has categorised the types of needs for which withdrawal is allowed. The most important category is illness. If the employee or a family member falls ill, money can be withdrawn from PF for treatment, and there is no limit on this, meaning withdrawals can be made any number of times.

For children's education and college fees, PF withdrawals can be made a maximum of 10 times during the course of employment, so paying fees every year will not be a problem. For weddings, withdrawals can be made 5 times, and this can be for the employee's own wedding or that of a son, daughter or sibling.

PF advances are also available for buying a house, flat or plot, or for building a house. Money can also be withdrawn to repay a home loan or for home repair and renovation. Withdrawals for house-related work can be made 5 times during the course of employment. Besides this, in certain special circumstances specified by EPFO, an advance can be taken twice in a single year.

The entire process is now online and there is no need to visit any office. Applications can be made on EPFO's official website. However, before applying, the PF account must be linked to Aadhaar, PAN and a bank account. Money is disbursed quickly only if KYC is complete, so anyone whose KYC is pending should get it done first. Once eligibility is met and the application is submitted, the money is credited to the bank account within a few days. This means PF money will now be available quickly in times of difficulty, and the new rule is expected to bring relief to many employees.