Winning Bizness Desk

Mumbai. The central government is working on a proposal that could allow salaried employees to withdraw a major part—or even the entire amount—of their Provident Fund (PF) before retirement. Currently, full PF withdrawal is permitted only upon reaching the retirement age of 58 or after being unemployed for at least two months. The proposed change aims to offer greater flexibility in fund usage during active working years.

Major Withdrawal Every 10 Years Likely

According to the proposal, employees may be allowed to withdraw a significant portion of their PF funds every 10 years. Reports suggest that this portion could be up to 60 percent or even more. This would allow employees to use their retirement savings at crucial career stages—such as at age 30, 40, or during other important phases—for personal needs or major financial requirements.

Current Rules Restrict Full Withdrawal

At present, full PF withdrawal is only allowed after retirement at the age of 58 or in case of two months of joblessness. Limited withdrawals are permitted in exceptional cases like medical emergencies, education, home buying, or marriage. After three years of PF contribution, one can withdraw up to 90 percent of the fund for house construction.

Emergency Withdrawals Now Up to ₹5 Lakh in 72 Hours

In June, the government increased the emergency withdrawal limit to ₹5 lakh, which can now be accessed within 72 hours. Earlier, the cap was ₹1 lakh. This decision was announced by Union Minister Mansukh Mandaviya and was backed earlier in March by the EPFO Executive Committee during its 113th meeting in Srinagar.

Automated Processing with Minimal Human Intervention

The new system for processing PF withdrawal claims—known as auto-settlement—relies entirely on IT-based infrastructure. If a user’s Universal Account Number (UAN) is linked with Aadhaar, PAN, and bank account, and KYC details are updated, the system can process claims within 3–4 days. This reduces the need for intervention by EPFO officers, ensuring faster approvals especially for medical, education, marriage, or housing-related claims.

Manual Processing Still Takes 15–30 Days

For cases that fall outside automated categories, manual settlement remains in place. Here, employees must fill out forms (such as Form 19, 31, 10C) and wait 15–30 days for their claim to be processed. This method involves verification of documents, KYC compliance, and eligibility by EPFO staff. Any missing information—like the date of exit—can delay the process further.

Soon: Withdraw PF via UPI and ATM

EPFO is also working on introducing UPI and ATM-based withdrawals under the EPFO 3.0 framework. Employees could be issued special withdrawal cards, similar to bank debit cards, to access PF funds through ATMs. For UPI transactions, PF accounts will need to be linked to UPI, enabling users to transfer funds directly to their bank accounts.

7 Point Summary

• Government plans to allow full or partial PF withdrawals before retirement.
• Employees may be allowed to withdraw 60% or more of PF every 10 years.
• Current rules allow full PF withdrawal only after age 58 or 2 months of unemployment.
• Emergency PF withdrawals up to ₹5 lakh now allowed in 72 hours.
• Auto-settlement system to fast-track simple PF claims in 3–4 days.
• Manual claims still take up to 30 days due to document verification.
• Soon, PF money could be withdrawn through UPI or ATM using special cards.