Provident Fund is a major financial safety net for salaried employees, especially during emergencies.
Right now, online PF withdrawals take around 5 to 7 days, while offline methods may take up to a month.
To make the process faster and smoother, the Employees’ Provident Fund Organization (EPFO) is introducing a new system that will allow subscribers to withdraw PF money directly through ATMs and UPI apps.
This service will be launched under the new EPFO 3.0 mobile app.
The new system is expected to start in January, and before that, EPFO will issue ATM cards to members so they can access their PF funds instantly.
How the New Withdrawal System Will Work
EPFO will provide a special ATM card linked to each subscriber’s PF account.
Using this card, people can withdraw their PF money from approved ATMs.
A list of these ATMs will be shared by the EPFO.
To withdraw money, you will simply need to:
Visit an EPFO-approved ATM
Insert your PF-linked ATM card
Enter your PIN
Select the withdrawal option
Collect your cash
EPFO is also enabling PF withdrawals through UPI platforms like Google Pay, PhonePe, and Paytm.
For this, members will have to link their PF account to UPI.
Once linked, PF funds can be withdrawn instantly through the UPI app.
Withdrawal Limits and Rules
Under EPFO 3.0, ATM withdrawals may be restricted to 50% of your total PF balance.
This means the entire amount cannot be withdrawn at once.
UPI withdrawals may have even lower limits.
Here are the key withdrawal conditions:
You can withdraw up to 90% of your PF balance one year before retirement. EPFO considers 55 as the retirement age.
Partial withdrawal is allowed for medical emergencies, house purchase or construction, or higher education.
If you face unemployment for a month, you can withdraw up to 75% of your PF balance.
If you become unemployed before retirement, you may withdraw the entire amount.
After completing seven years of service, you can withdraw 50% of your contribution up to three times.
Will You Have to Pay Tax?
If you have completed five years of total service, PF withdrawals will not attract income tax.
The five-year period does not have to be completed in a single job; service from multiple companies can be combined.
What to Expect from EPFO 3.0
EPFO 3.0 aims to simplify the experience for over 80 million subscribers.
Claims will be processed instantly without manual checks.
Any mistakes in PF details can be corrected online without visiting an office.
The e-KYC process will become faster, and updates will be available immediately on the app or portal.
Pensioners will also benefit from a centralized payment system, allowing them to receive pensions from any bank.
Withdrawals for purposes like marriage, education, and housing will also become easier.
