PF Withdrawal UPI: EPFO To Launch UPI Based PF Withdrawal System
PF Withdrawal UPI: Great news has emerged for nearly 80 million subscribers of the Employees’ Provident Fund Organization (EPFO). In the era of Digital India, the process of withdrawing Provident Fund money is set to become extremely simple and fast. The Central Labor Ministry is developing a state-of-the-art system that will allow PF members to withdraw their accumulated funds using the Unified Payments Interface (UPI).
The lengthy and complicated process currently required to withdraw PF money is soon going to be a thing of the past.
How Will the UPI Facility Work?
According to the central government’s plan, the target is to roll out this new system by April 2026. Currently, members have to fill out claim forms online or offline to withdraw PF, which is quite time-consuming. Even with the ‘auto-settlement’ mode, it takes at least three days for the money to be credited to the account.
However, with the new system, this waiting period will end. Funds will be transferred to your linked bank account as soon as you enter your UPI PIN on your smartphone. According to a PTI report, under this system, a portion of the PF fund will be kept ‘frozen’ or secure, while members will be able to transfer the remaining larger portion to their accounts via UPI as needed. Once the money is in the bank, it can be withdrawn from an ATM or used for digital payments.
Rules for Withdrawal for Various Purposes
PF funds act as a major support during crucial stages of an employee’s life. The conditions and limits for withdrawing money for specific purposes are detailed in the table below:
| Purpose | Service Requirement | Withdrawal Limit |
|---|---|---|
| Buying House/Plot | Must complete 5 years of continuous service. | Up to 24 months’ salary for purchase, and 36 months’ salary for purchase & construction. |
| Medical Treatment | No specific condition. | Employee’s share + interest OR 6 months’ salary (whichever is less). |
| Home Loan Repayment | Must complete 3 years of continuous service. | Up to 90% of the accumulated amount. |
| House Repair | 5 years from the completion of house construction. | Amount equal to 12 months’ salary. |
| Marriage | Must complete 7 years of continuous service. | Up to 50% of the employee’s contribution with interest. |
Rules for Withdrawal in Case of Job Loss
In the event of job loss or unemployment, the PF fund serves as a lifeline. According to the rules:
- 75% of the total PF balance can be withdrawn one month after losing the job.
- The remaining 25% can be withdrawn two months after job loss.
What About Income Tax?
It is also important to keep income tax rules in mind regarding PF withdrawal. If an employee withdraws money after completing 5 years of continuous service, they are not liable to pay any income tax. Interestingly, this 5-year period does not have to be with a single company. Even if one works in multiple companies, the tax exemption applies provided the total tenure (excluding breaks) is 5 years or more.
Currently, EPFO is working on resolving some technical glitches in their software. Once these issues are resolved, millions of subscribers will be able to enjoy the benefit of instant money transfer via UPI in the coming days.
