The Employees’ Provident Fund Organization (EPFO) has introduced several rule changes that will benefit employees, especially those planning to buy their first home.
Usually, 12% of an employee’s basic salary is deposited into the Provident Fund (PF), and the employer contributes an equal amount.
Previously, employees could withdraw an amount equal to 36 months’ contribution for housing purposes.
Now, under Para 68-BD of the EPF Scheme 1952, EPFO members can withdraw up to 90% of their total PF balance for housing-related expenses.
This money can be used for:
Buying or constructing a house
Making a down payment
Paying EMIs on a home loan
Key Changes:
Members can now withdraw money after just 3 years of opening their EPF account (earlier, 5 years of service was required).
This 90% withdrawal benefit can only be used once in a lifetime.
Faster Claims, Emergency Withdrawals, and Simplified Process
Emergency Withdrawals Made Easier
EPFO has also updated rules related to emergency withdrawals:
Members can now withdraw up to ₹1 lakh instantly in case of emergencies.
Soon, funds will be made available via UPI and ATMs, but only for those whose UAN is active, KYC is complete, and bank account is linked with Aadhaar.
Increased Auto Settlement Limit
During the COVID-19 pandemic, the government introduced auto settlement of PF claims without manual verification.
This feature is now permanent, and the limit for auto settlement has been raised:
Earlier: ₹1 lakh
Now: ₹5 lakh
These claims are processed automatically within 72 hours.
Other Simplifications
Verification steps have been reduced from 27 to 18, speeding up claim settlements.
Members no longer need to upload a verified photocopy of a cancelled cheque or passbook for online claims, as bank details are already verified via UAN-Aadhaar linking.
Employees can now update their bank details by entering the new account number and IFSC code, which will be verified through Aadhaar OTP, without needing employer verification.
What is Provident Fund (PF)?
Every salaried employee in the government or private sector has a PF account. Here’s how it works:
12% of the basic salary goes into the employee’s PF.
The employer also contributes 12%, but:
8.33% goes into the Employee Pension Scheme (EPS)
The remaining 3.67% goes into the PF account
Note: The pensionable salary limit is ₹15,000. If your basic salary is ₹15,000 or less, you’re eligible for the pension scheme.
When Can You Withdraw from PF?
You can withdraw money from your PF account in certain situations:
Buying or constructing a home
Medical emergencies
Marriage or education (self or family)
Repayment of home loan
Unemployment
Before retirement
