EPF Withdrawal Rules Under the New EPF Scheme: 75% Now, the Last 25% After a Year, and the Tax

Search "EPF withdrawal rules" and you will find three answers to the same question: 75% after one month without a job, 75% only after twelve months, or 100% after two months. The confusion comes from mixing rules of the old 1952 scheme with the new one, and the board's announcements of October 2025 with the scheme as finally notified. The Employees' Provident Funds Scheme, 2026 is now law, so this guide reads the rules from its text, paragraph by paragraph.

Written on 3 November 2026. The scheme, made under the Code on Social Security, 2020, is notification G.S.R. 525(E) dated 29 June 2026 and took effect the day it was published; a corrigendum of 4 August 2026 corrected wording only. It applies to EPFO's members; employees of establishments running their own exempted PF trust follow their trust's rules within the scheme's conditions. The tax rules are from the Income-tax Act, 2025.

The idea behind the new rules: a floor you cannot touch

The scheme splits your PF into two parts (paragraph 46):

• Minimum balance. 25% of the total contributions credited to you, your share and your employer's, together with the interest on them, up to the date of the withdrawal. It must remain in the account after any partial withdrawal.
• Eligible member balance. Whatever is in your account above that minimum. Every partial withdrawal comes out of this.

Two changes make the eligible balance bigger than people expect. It includes the employer's share, which the old advances mostly did not, and the scheme lets most withdrawals take up to 100% of it. The Ministry explained in October 2025 that before the change members could take only their own contribution and interest, at 50% to 100% depending on the purpose.

The board's stated reason for the floor is retirement saving: the Ministry noted that half of all members had less than ₹20,000 in PF at final settlement, and that the 25% keeps earning EPFO's interest, 8.25% for 2025-26.

Partial withdrawals: three kinds of need

Thirteen separate advances under the old scheme became one rule with three categories. Each withdrawal must be at least ₹1,000, and every kind needs 12 months of total membership (paragraph 46).

Three details matter in practice:

• No reason needed under special circumstances. Under the old scheme you had to show a natural calamity, a lockout or closure, continued unemployment or an epidemic, and claims were often rejected. The board's decision of 13 October 2025 removed that: you apply without stating a reason.
• The counts start again. The number of times is counted afresh from the day the new scheme began, whatever you withdrew under the 1952 scheme (paragraph 46(6)).
• Leaving before 12 months. A member who exits employment before completing 12 months of membership can still take a partial withdrawal, up to the eligible balance (paragraph 46(5)).

Membership counts service with the same employer before the scheme applied, membership of the Fund, and time in an exempted employer's PF, as long as you did not close the account by withdrawing in between (paragraph 47).

If you lose or leave your job

Taking the full balance has a cost beyond the interest lost: a member who withdraws everything and joins a covered employer again starts as a fresh member (paragraph 49(3)).

When the whole balance can come out at once

The 12-month wait does not apply in the cases listed in paragraph 49(1). You can withdraw the full amount, including the 25%:

• on retirement after the age of 55 (or on reaching 55 before the payment is authorised);
• on retirement for permanent and total incapacity for work, certified by a doctor; tuberculosis, leprosy and cancer count as incapacity;
• just before migrating from India to settle or work abroad;
• on retrenchment, individual or mass;
• on voluntary retirement under a scheme agreed with the employer;
• after a two-month wait, where the establishment closes and you are moved to an uncovered unit, the same employer transfers you to an uncovered unit, or you are discharged with retrenchment compensation under the Industrial Relations Code.

Your pension money follows a different clock

Part of the employer's contribution goes into the Employees' Pension Scheme, not your PF, and it has its own rule. A monthly pension needs at least 10 years of eligible service (EPS, 2026, paragraph 12). If you leave before that, you get a withdrawal benefit or a scheme certificate that carries the service forward, but you can take the withdrawal benefit only 36 months after your last contribution fell due, or on reaching superannuation if that is earlier (paragraph 13).

The Ministry's reasoning: about three-quarters of pension members were withdrawing within four years, ending any chance of a pension, and while the money stays in, the member's family remains eligible for pension benefits for up to three years after contributions stop if the member dies. Taking a scheme certificate instead of the money keeps your service on record for a future pension.

The tax on a withdrawal

The tax rules speak of the accumulated balance becoming payable, so plan a final settlement around the five-year mark where you can, and transfer rather than withdraw when you change jobs.

How long EPFO can take

Claims are filed online on EPFO's designated portal (paragraph 54). A complete claim with its documents has to be settled, with the money paid, within 20 days of EPFO receiving it, and any deficiency must be pointed out within the same 20 days. Where a complete claim is held up beyond 20 days without good reason, the scheme lets penal interest of 12% a year be charged on the amount, and it is recovered from the Commissioner’s salary (paragraph 54(7) to (9)). On a final settlement, interest runs up to the date the payment is authorised, not just the date you applied (paragraph 42).

What is being said, and what the scheme says

Frequently Asked Questions

How much of my PF can I withdraw now? Up to your eligible balance: everything above the minimum balance of 25% of the contributions and interest credited to you. You need 12 months of membership, and the purpose must be illness, education, marriage, housing or special circumstances.

I lost my job. Can I take all my PF? Not at once. You can take the eligible balance straight away; the remaining 25% can be withdrawn after you have been out of any covered employment for 12 continuous months. Retrenchment, VRS, permanent incapacity, retirement after 55 and emigration are exceptions, and allow the full amount immediately.

How many times can I withdraw for my children's education? Ten times during your membership, counted afresh from the start of the new scheme. Marriage and housing are allowed five times each, and special circumstances twice in each financial year.

Do I have to give a reason under special circumstances? No. EPFO's board removed the need to show a calamity, closure or unemployment in October 2025, and the scheme states no reasons for this category.

Is a PF withdrawal taxable? A final payout is tax-free after five years of continuous service, counting earlier employers whose PF was transferred in, or if service ended through illness or the employer's closure. Otherwise the payout is taxed by recomputing past years, and EPFO deducts 10% TDS if the payment is ₹50,000 or more.

Can I withdraw my EPS pension money when I leave? Only 36 months after your last contribution fell due, or at superannuation if earlier, and only where your service is short of the 10 years a pension needs. With 10 years you are entitled to a pension instead.

How long does EPFO have to pay? Twenty days from receiving a complete claim. A deficiency must be pointed out within those 20 days, and an unexplained delay can attract 12% penal interest.