Salaried employees may be allowed to withdraw 60% or 100% from EPF accounts every 10 years: Report

The central government is considering revising the strict rules for withdrawing money from Employees’ Provident Fund (EPF) accounts by allowing members to withdraw up to 60% or 100% of their accumulated corpus once every 10 years, according to a Moneycontrol report.

Salaried employees may not have to wait for unemployment or retirement to withdraw money from their EPF accounts if this proposal gets implemented.

Presently, full withdrawal from the EPF account is allowed only after a member retires, usually after they turn 58 years old, or if the individual is unemployed for over two months.

If the proposal goes through, members might be able to withdraw all of their funds even if they’re in their 30s, according to the report.

Such a provision for EPF withdrawal will give members the flexibility to plan their finances as per their individual needs.

However, the report also said that the government might allow only 60% of the accumulated corpus to be withdrawn every 10 years, and not the full amount.

EPFO withdrawal rules

The EPFO now allows for withdrawal of up to 90% of the funds for purchasing land or building a house. Under the new Para 68-BD of the EPF Scheme, 1952, EPF subscribers can now withdraw up to 90% of their PF corpus for housing needs, including purchase, construction, or even EMI payment of a residential property.

Further, the eligibility period has been shortened, and members can now withdraw their funds after three years from the opening of their EPF accounts.

Previously, members could withdraw up to 36 months’ basic wages and dearness allowance (DA) or the total of employee and employer share with interest, or the total cost, whichever is lower, for different housing needs. Moreover, the eligibility period was at least five years of EPFO membership.

The new rules aim to give more flexibility to EPF subscribers. While the EPFO has also removed the earlier restrictions for members who are already enrolled in housing schemes, the withdrawal for housing purposes is still allowed only once in a lifetime.

The EPFO, in June this year, increased the auto-settlement limit to ₹5 lakh from ₹1 lakh before, allowing its members to receive funds faster in times of need.