October 13th will be a day etched in history for millions of EPFO subscribers. The EPFO’s Central Board of Trustees approved a proposal for major changes to several rules, including withdrawals. This means that privately employed individuals will be able to withdraw funds from their EPF accounts more easily than before. Let’s learn about these major changes.
1. Only 12 months service period is required for withdrawal
The EPFO has reduced the required service period for withdrawal to just 12 months. Previously, different service periods were required for different purposes. For example, a 7-year service period was required for withdrawal due to marriage. This resulted in long wait times for subscribers.
2. Permission to withdraw 75% of the money deposited in the account
The EPFO has stated that subscribers will be allowed to withdraw 100% of their EPF account balance. However, keeping retirement in mind, it has imposed a 25% balance requirement. This means subscribers can withdraw 75% of their funds.
3. Now only three conditions for withdrawal
Previously, subscribers had to meet numerous requirements for withdrawing their funds. This caused considerable confusion. The approval process took a long time, and applications were often rejected. Now, the EPFO has established only three withdrawal requirements: Essential Needs, Housing Needs, and Special Circumstances.
4. No documents will be required for withdrawal
Under the new rule, if a subscriber withdraws under certain conditions, they will not be required to submit any documents. Experts say this will significantly reduce the withdrawal process time. Subscribers will also not have to deal with the hassle of gathering documents.
5. Allows withdrawal of more money for marriage and education
Subscribers will now be able to withdraw more money for marriage and education. Withdrawals can be made up to 10 times for education and 5 times for marriage. Previously, only three withdrawals were allowed. Experts say the withdrawal limit has been increased to address rising education and marriage expenses.
6. Waiting for 12 months to apply for settlement
The EPFO has tightened the rules for applying for PF settlement. Previously, applications were made two months after leaving a job. Now, applications for PF settlement must be made 12 months after leaving the job. Pension withdrawals must be applied for after 36 months.
