EPF Withdrawal Rules 2026: What the New EPFO Scheme Actually Changed

The rules for taking money out of your PF changed when the Employees’ Provident Funds Scheme, 2026 replaced the 1952 Scheme. It was notified by the Ministry of Labour and Employment as G.S.R. 525(E), dated 29 June 2026, under the Code on Social Security, 2020, and takes effect from its publication in the Official Gazette.

Three things changed that affect almost everyone with a PF account:

• 25% of your balance has to stay in the account when you take a partial withdrawal.
• The long list of withdrawal purposes is now three categories — essential needs, housing, and special circumstances.
• A full withdrawal after leaving a job needs 12 months of unemployment, not two months.

Everything below is from the Scheme text itself, with the paragraph numbers, so you can check any of it.

The 25% rule: what you can actually take out

This is the change that surprises people. Under paragraph 46, a partial withdrawal cannot touch your whole balance. The Scheme defines a Minimum Balance that must remain:

“Minimum balance” means an amount equivalent to twenty-five per cent of the aggregate of the total contributions made to the Fund to the credit of the member (inclusive of both the employee’s and the employer’s share and interest thereon).

What you can withdraw is called the Eligible Member Balance — your balance minus that 25%.

A worked example

Say your PF account holds ₹4,00,000, counting your contributions, your employer’s, and the interest on both.

• Minimum Balance (25%): ₹1,00,000 — this stays
• Eligible Member Balance: ₹3,00,000 — the most you can take in a partial withdrawal

Within each category, the Scheme allows up to 100% of the Eligible Member Balance. So “100%” means all of the ₹3,00,000, never the full ₹4,00,000.

The smallest partial withdrawal allowed is ₹1,000, and applications are made on the designated portal.

The three withdrawal categories

1. Essential needs — paragraph 46(2)

Each of these needs 12 months’ total membership of the Fund first.

2. Housing — paragraph 46(3)

One category now covers five purposes:

• buying a flat or house
• buying a site to build on
• constructing a house
• repaying a home loan taken for any of the above
• additions, alterations, renovations or improvements to an existing house or flat

Up to 100% of the Eligible Member Balance, after 12 months’ membership, and not more than five times during your membership.

3. Special circumstances — paragraph 46(4)

Up to 100% of the Eligible Member Balance, after 12 months’ membership, up to twice in a financial year.

Two details worth knowing

• Leaving a job before completing 12 months’ membership does not block you. Paragraph 46(5) allows a partial withdrawal capped at the Eligible Member Balance.
• Your counts reset. Paragraph 46(6) says the permitted number of times is calculated afresh from the date the Scheme commenced, so withdrawals you made under the old Scheme do not use up the new limits.

Full withdrawal: when you can close the account

Paragraph 49(1) lists when the entire balance is payable:

• retirement from service after turning 55
• retirement due to permanent and total incapacity, certified by a medical officer
• immediately before leaving India permanently or for a job abroad
• on retrenchment, whether individual or mass
• on voluntary retirement under a scheme agreed between employer and employee
• certain closure and transfer situations, where payment is made only after a two-month wait

The 12-month rule that most coverage misses

If you simply leave a job and want your full PF, paragraph 49(2) applies. Its proviso is strict:

a member shall not be eligible to withdraw unless the member has not been employed in any factory or other establishment to which the Code applies for a continuous period of not less than twelve months immediately preceding the date of application for withdrawal.

In plain terms: you must have been out of covered employment for a full 12 months before you can take the whole balance out.

There is one exemption, written into the Scheme: women resigning from service in order to get married do not have to serve the waiting period.

Paragraph 49(3) adds a consequence. If you do withdraw everything this way and later take another job covered by the Scheme, you have to qualify for membership again and are treated as a fresh member — which resets the service record that matters for pension.

For most people changing jobs, transferring the balance rather than withdrawing it is the path that keeps that record intact.

Counting your 12 months of membership

Several withdrawals need 12 months’ membership. Paragraph 47 says this includes service under the same employer before the Scheme applied to them, previous periods of Fund membership, time in a private PF of an exempted establishment, and membership as an exempted employee immediately before your current membership — as long as you did not break membership by withdrawing your PF in between.

So switching jobs does not necessarily reset the clock, but taking everything out does.

If a member dies

Paragraph 50: the balance goes to the nominee where a valid nomination exists. Without one, it is shared equally among family members in the order the Scheme lists — spouse, dependent minor son, unmarried dependent daughter, an infirm dependent child, dependent parents including a woman member’s parents-in-law, and a dependent minor sibling of an unmarried member with no living parents. Failing all of that, it goes to whoever is legally entitled.

This is the argument for keeping your nomination up to date, since a valid nomination avoids the whole question.

International workers

Paragraph 51 sets a different bar: an international worker may take the full balance on retirement after 58, or on permanent and total incapacity, with other conditions in that paragraph.

What to do

1. Work out your Eligible Member Balance before planning any withdrawal: total balance minus 25%.
2. Check your nomination on the EPFO portal.
3. Transfer rather than withdraw when changing jobs, unless you genuinely need the money, so you do not become a fresh member.
4. Watch for EPFO’s implementation instructions. The Scheme is the law; EPFO issues the circulars and portal changes that put it into practice.

Source

Employees’ Provident Funds Scheme, 2026 — G.S.R. 525(E), Ministry of Labour and Employment, 29 June 2026. Paragraph numbers in this article refer to that notification.