EPFO: EPFO's new rules come into effect! Before withdrawing your entire PF amount, know these important things..

The Central Government has taken a historic and extremely reassuring decision for the country's more than 70 million employees. Now, members of the Employees' Provident Fund Organization (EPFO) will be able to withdraw up to 100% of their hard-earned money, or their Provident Fund (PF), if needed. At a meeting of the EPFO's Central Board of Trustees (CBT) chaired by Union Labor Minister Mansukh Mandaviya, the complex and outdated rules related to PF withdrawals were completely overhauled, simplified and made more flexible.

This major decision aims to simplify the lives of employees, allowing them to avoid the hassle of running around offices and lengthy paperwork to access their own funds for emergency financial needs, such as illness, children's education, or marriage. The government has also clarified that these changes will not negatively impact employees' retirement savings or pension eligibility. Let's understand these new rules in detail to see how easy it is for you to withdraw your PF funds.

Ending the Hassle of Complex Rules
Until now, there were 13 different rules and conditions for withdrawing PF funds, which were extremely complex. Employees often found it difficult to understand which form to fill out and what documents to attach. This confusion resulted in thousands of claims being rejected or taking a long time.

To address this problem, the government has eliminated all 13 provisions and created a single, streamlined rule. Withdrawals are now divided into three main categories:

Essential Needs: This includes important expenses such as treatment for a family member's serious illness, children's higher education, and marriage.

Housing Needs: If you are looking to purchase a new house or flat, acquire land to build a house on, or renovate or expand your existing house.

Special Circumstances: This category has been made the most liberal. Previously, a valid reason, such as job loss, company closure, or a natural disaster, was required. Now, members will be able to withdraw funds under this category without providing any specific reason.

The biggest benefit of this simplification is that the requirement to submit any documentation for partial withdrawals has been eliminated. This will make the entire process 100% automated, and claims will be settled quickly directly into your bank account.

What is the truth about 100% withdrawal?

Although the news is referring to 100% withdrawal, it is important to understand a technical aspect. According to the new rules, employees can withdraw up to 100 percent of their 'Eligible Balance,' which includes both the employee and employer's share.

But there is an important condition. The Board has mandated that every member must maintain at least 25 percent of their total contribution in their account at all times. Simply put, you will only be able to withdraw up to 75 percent of your current PF balance at one time.

For example, suppose you have a total balance of ₹10 lakh in your PF account. Under the new rules, you can withdraw up to ₹7.5 lakh for your needs, while the remaining ₹2.5 lakh will remain in your account as the minimum balance. The government argues that maintaining the minimum balance in the account will allow members to continue to benefit from the attractive interest rate offered by the EPFO ​​(currently 8.25% per annum) and compound interest, which will help them build a large corpus for retirement.

Withdraw funds frequently for marriage and education
The government has also significantly liberalized the withdrawal limit. Previously, an employee could withdraw PF funds only three times during their entire career for children's education and marriage. This limit proved insufficient for many families.

Now, by changing this rule, the withdrawal limit for children's education has been increased to 10 times and for marriage to 5 times. This is a huge relief for middle-class families who often face financial difficulties due to their children's expensive education or marriage expenses.

In addition, another major change has been made regarding the minimum service period. Previously, different periods of employment were required for different withdrawals, but now this has been reduced to just 12 months, or one year, making it uniform for all partial withdrawals. This means that even if you have worked for an organization for just one year, you will be eligible to withdraw money from your PF for these needs. This rule will prove especially beneficial for new and young employees.

Withdraw money from your PF account from home:
If you need money and want to withdraw an advance from your PF account, it's now much easier. You don't need to go anywhere; you can do it from your mobile or computer. Just follow the steps below:

Step 1: Visit the EPFO ​​website - First, you need to visit the EPFO ​​member website. The link is: https://unifiedportal-mem.epfindia.gov.in/memberinterface/

Step 2: Log in to your account - Once the website opens, enter your UAN number, password, and the provided captcha code to log in.

Step 3: Select the 'Online Claim' option - After logging in, you will see the 'Online Services' option in the top menu. Click on it and then select 'Claim (Form-31, 19, 10C & 10D)'.

Step 4: Verify your bank account - All your details will now appear on your screen. Verify by entering the last four digits of your bank account and clicking 'Yes' to proceed.

Step 5: Enter your withdrawal details - Now click on 'Proceed for Online Claim'. On the next page, go to 'I want to apply for' and select 'PF Advance (Form 31).' Next, you'll need to enter the reason for the withdrawal (e.g., illness, marriage, house construction) and the amount you wish to withdraw. Also, enter your address.

Step 6: Confirm with Aadhaar OTP - After filling in all the information, click 'Get Aadhaar OTP'. An OTP will be sent to the mobile number linked to your Aadhaar card.

Step 7: Submit Claim - Enter the OTP in the provided field and submit your claim.

That's it. Your claim has been successfully submitted. After the EPFO ​​completes the verification, the money will be credited directly to your bank account.

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