EPF Withdrawal Rules 2026: What the New EPF Scheme Changed
The Employees' Provident Funds Scheme, 2026 (notified 29 June 2026) replaced the 1952 scheme. A full withdrawal after leaving a job now needs 12 months out of covered employment, with exceptions, and 25 percent of the balance must stay during partial withdrawals. Withdrawals after five years of service remain tax-free.
The old rule was simple: after two months without a job, you could withdraw your whole PF balance. That has changed. The Employees' Provident Funds Scheme, 2026, notified on 29 June 2026 (G.S.R. 525(E)) and published on 1 July 2026, replaces the EPF Scheme, 1952. For most people the practical effect is that a full withdrawal after leaving a job now needs 12 months out of covered employment, while partial withdrawals during a job have been simplified.
Full settlement after leaving a job
- ✓The 12-month rule. A member can claim full settlement after remaining out of employment in a covered establishment for 12 months, with listed exceptions. Female members who resign to marry are exempt from the wait.
- ✓The 25 percent floor. For partial withdrawals, 25 percent of the member's balance must stay in the account. That covers the employee share, the employer share and interest.
- ✓Retirement. At age 55 or above, the full balance can be withdrawn without the 12-month wait.
- ✓Pension. Reports of the Central Board of Trustees' decisions say the waiting period for final withdrawal of the EPS pension amount moved from 2 months to 36 months.
Reports differ on the detail of an advance of up to 75 percent of the eligible balance during unemployment. Check the current position on the EPFO member portal before you tell an employee how much they can take and when.
Partial withdrawals while employed
The Central Board of Trustees, at its 238th meeting on 13 October 2025, merged 13 earlier provisions into three categories, and the new Scheme builds on that.
| Category | Examples | Notes |
|---|---|---|
| Essential needs | Illness, education, marriage | Education can be claimed up to 10 times and marriage up to 5 times, with a share of the employee contribution |
| Housing | Buying or building a home, repaying a home loan, renovation | Longer service is generally needed, and the cap is higher |
| Special circumstances | Natural calamity or financial distress | Fewer documents are required |
- ✓A minimum of 12 months of membership applies to partial withdrawals.
- ✓The minimum amount of a partial withdrawal is ₹1,000.
- ✓The 25 percent minimum balance applies throughout.
Tax on withdrawals
| Situation | TDS |
|---|---|
| Continuous service of 5 years or more | No tax. The withdrawal is exempt |
| Under 5 years and a withdrawal above ₹50,000, PAN on record | 10 percent |
| Under 5 years and a withdrawal above ₹50,000, no PAN | 20 percent |
Service is counted across employers if the PF account was transferred. If the account was withdrawn and closed, the count starts again.
Why claims get rejected
- ✓The UAN is not active, or the KYC (Aadhaar, PAN, bank account) is not linked and approved.
- ✓The name or date of birth does not match across records.
- ✓The employer has not updated the date of exit.
- ✓The member has not joined a new employer but the record shows overlap.
What employers should do
- Activate each employee's UAN soon after joining, and approve their KYC promptly.
- Update the exit date within a few days of the last working day.
- Pay contributions and file the ECR by the 15th, so the history is complete.
- Help leavers transfer instead of withdraw. The transfer keeps the service continuous.
- Tell leavers about the new waiting period in the exit process and in the final settlement letter.
What employees should know
If you are changing jobs, transfer your PF to the new employer instead of withdrawing it. The money continues to earn interest (8.25 percent for 2025-26), your five-year count stays alive, and you avoid tax and the new waiting period.
Sources
- ✓Right to Information wiki: EPF Scheme 2026, what is official
- ✓EPFO press brief on the 238th CBT meeting, 13 October 2025
- ✓SCC Online: highlights of the 238th CBT meeting
- ✓FutureX: PF withdrawal rules 2026
Withdrawal conditions are detailed and are being clarified in circulars. Treat this as a guide and confirm the current rule on the EPFO portal.
Written by
HR Manager, Airwix Technologies (Sleet)
Nihit Dobariya is the HR Manager at Airwix Technologies in Ahmedabad, where he runs HR and payroll for the team behind Sleet. He writes about payroll, PF and ESIC, professional tax, the labour codes and everyday HR practice for Indian employers, and checks each rule against the official notification before it is published.
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