EPF Withdrawal Rules 2026: New Limits, VPF, Tax and Transfers Explained
Last updated: 13 October 2026
Quick answer: Under the EPF withdrawal rules in force from 29 June 2026, you can make partial withdrawals after 12 months of membership for illness, education, marriage, housing or "special circumstances", but 25% of your balance must stay invested. Full withdrawal after leaving a job needs 12 months of unemployment. Interest on your own EPF plus VPF contributions above ₹2.5 lakh a year is taxable.
Last updated: 13 October 2026 Quick answer: Under the EPF withdrawal rules in force from 29 June 2026, you can make partial withdrawals after 12 months of membership for illness, education, marriage, housing or "special circumstances", but 25% of your balance must stay invested. Full withdrawal after leaving a job needs 12 months of unemployment. Interest on your own EPF plus VPF contributions above ₹2.5 lakh a year is taxable. Key takeaways Eligibility: most partial withdrawals now need just 12 months of membership. Locked floor: 25% of the balance is a minimum balance; on ₹8 lakh you can take up to ₹6 lakh. Final settlement: 12 months' unemployment for full PF, 36 months for the EPS withdrawal benefit. Interest: 8.25% for FY 2025-26; VPF earns the same rate. Tax: withdrawals after five years of continuous service are tax-free; earlier ones above ₹50,000 attract 10% TDS. For most salaried Indians, the EPF account is the first and largest pool of savings, and for years it was also the hardest to touch. Thirteen different advance rules, long service conditions and paper claims meant people often withdrew everything on leaving a job, simply because it was easier. That has changed. The EPFO's Central Board of Trustees simplified withdrawals in October 2025, and the government notified new EPF, EPS and EDLI Schemes on 29 June 2026 under the Code on Social Security, 2020. This guide covers the new EPF withdrawal rules, how VPF and EPF interest are taxed, TDS, transfers on a job change and the practical mistakes that cost members lakhs. What are the new EPF withdrawal rules in 2026? The Employees' Provident Fund Scheme, 2026 replaced the EPF Scheme, 1952 on 29 June 2026. Existing members moved over automatically. According to the KPMG summary of the new schemes (https://assets.kpmg.com/content/dam/kpmgsites/in/pdf/2026/07/KPMG-Flash-News-New-Social-Security-Schemes-2026.pdf) , they took effect on publication in the Official Gazette. The partial withdrawal rules follow the decisions in the EPFO's 238th CBT press brief (https://www.epfindia.gov.in/site_docs/PDFs/EPFO_PRESS_RELEASES/PressBrief_MOL&EChairs238thMeetingCBT_EPF_13102025.pdf) of 13 October 2025. Thirteen separate purposes have been merged into three categories: Category Purpose Minimum membership How often Essential needs Illness (self or family) 12 months No fixed limit Essential needs Education 12 months Up to 10 times Essential needs Marriage 12 months Up to 5 times Housing needs Buying, building or repaying a home loan Check the claim form Up to 5 times Special circumstances Any reason; no proof needed 12 months Twice a financial year Each withdrawal can be up to 100% of the "eligible" balance, which now includes both your share and your employer's share plus interest. Before, marriage and education advances were limited to three in total across a career. EPF withdrawal rules 2026 comparison of old and new partial withdrawal and final settlement rules How does the 25% minimum balance work? The new scheme sets aside 25% of your accumulated balance as a minimum balance that cannot be withdrawn while you remain a member. Everything above it is your eligible surplus. Example: with ₹8 lakh in your account, ₹2 lakh is locked and ₹6 lakh is available for partial withdrawal. The locked part keeps earning interest, currently 8.25%, and is paid out at final settlement. The EPFO's stated aim is to let members meet needs without emptying the account, since the old rules pushed many to take full settlements. With 12-month eligibility and "no reason needed" special withdrawals, access is easier than before; only the last quarter of the balance is protected. When can you withdraw your full PF? Full withdrawal (final settlement) is allowed on retirement after age 55, permanent incapacity, permanent migration abroad, and certain other events. If you leave a job before 55, you must now be unemployed for 12 continuous months before claiming full settlement, up from two months earlier. Women leaving employment to marry are exempt from the wait. The Employees' Pension Scheme, 2026 sets a longer gap: the EPS withdrawal benefit for members with under ten years of service is payable only 36 months after the last contribution was due, or on superannuation if earlier. Our EPF and EPS pension guide (/insights/epf-calculator-eps-pension-guide) explains why carrying EPS service forward usually beats withdrawing it. If you lose a job and need money sooner, the special-circumstances withdrawal still gives access to up to 75% of your balance after 12 months of membership. Our 90-day money plan after a layoff (/insights/laid-off-money-plan-it-professionals) covers what to tap first. How long does an EPF withdrawal take? Advance claims up to ₹5 lakh are settled automatically, without manual checks, for members with complete KYC. The EPFO raised this auto-settlement limit from ₹1 lakh in June 2025 and said such claims are processed within three days ( PIB release, 24 June 2025 (https://labour.gov.in/sites/default/files/pib2139291.pdf) ). The simplified 2026 categories, with no supporting documents for most claims, are designed to push more claims into auto mode. The EPFO has also been testing UPI-based withdrawals as part of its EPFO 3.0 technology upgrade. As of October 2026, check the EPFO member portal or UMANG app for whether this is available to you, rather than relying on social-media claims. Log in to the EPFO member portal with your UAN and password or OTP. Confirm Aadhaar, PAN and bank account are verified under "Manage KYC". Choose "Online Services", then "Claim", and verify the last four digits of your bank account. Select the purpose and amount, and submit with Aadhaar OTP. Track the claim status; the money arrives in your linked bank account. What does a partial withdrawal really cost? Easier access has a price. Every rupee withdrawn stops compounding at a sovereign-backed, largely tax-free rate. Taking ₹5 lakh out at 35 means giving up about ₹31 lakh at 58, assuming 8.25% continues. At 45, the same ₹5 lakh would have become about ₹14 lakh. For short-term needs, compare other options first: an emergency fund (/insights/emergency-fund-guide-india) or a loan against mutual funds may cost less over time. Our comparison of personal loans, loans against mutual funds and gold loans (/insights/personal-loan-vs-lamf-vs-gold-loan) sets out the costs. EPF partial withdrawal cost chart showing what ₹5 lakh withdrawn at different ages would have grown to by 58 What is VPF and how is it different from EPF? The Voluntary Provident Fund (VPF) is an optional contribution above the mandatory 12%, made through your EPF account. You ask your employer's payroll team to deduct an extra amount; there is no separate account. VPF earns the same rate as EPF, 8.25% for FY 2025-26, and follows the same withdrawal and tax rules. No employer match: your employer is not required to contribute on the VPF amount. Limit: up to 100% of basic plus DA, but tax rules make anything above ₹2.5 lakh a year (including your 12%) less attractive. Deduction: VPF counts towards the ₹1.5 lakh deduction under section 123 of the Income-tax Act, 2025 (old section 80C) only in the old tax regime. Flexibility: you can usually start, change or stop VPF at the start of a financial year, depending on payroll policy. Compared with PPF at 7.1% and a ₹1.5 lakh yearly cap, VPF offers a higher rate for salaried investors; our PPF guide (/insights/ppf-complete-guide) compares the two on liquidity and tenure. Is EPF interest taxable above ₹2.5 lakh? Yes. Interest on your own contributions (EPF plus VPF) made since 1 April 2021 above ₹2.5 lakh in a financial year is taxable every year at your slab rate. The limit is ₹5 lakh where the employer makes no contribution, typically government employees in GPF-type funds. This now sits in Schedule II of the Income-tax Act, 2025 (https://www.incometaxindia.gov.in/w/schedule-ii-9) , and the EPFO tracks the excess in a separate taxable sub-account. Basic + DA (₹/month) Employee 12% a year VPF room under ₹2.5 lakh Monthly VPF room ₹50,000 ₹72,000 ₹1,78,000 ₹14,833 ₹1,00,000 ₹1,44,000 ₹1,06,000 ₹8,833 ₹1,50,000 ₹2,16,000 ₹34,000 ₹2,833 ₹2,00,000 ₹2,88,000 Nil; ₹38,000 already over Nil The tax bite starts small but grows. On a ₹2 lakh basic, ₹38,000 a year goes into the taxable sub-account. After ten years that sub-account is about ₹5.6 lakh, earning about ₹46,000 of taxable interest a year. At the 30% slab plus cess, that is around ₹14,000 of tax annually, still a respectable post-tax yield of about 5.7%. The employer side has a separate cap: employer contributions to EPF, NPS and superannuation together above ₹7.5 lakh a year are taxed as a perquisite. VPF tax-free limit chart showing how much voluntary provident fund contribution fits under the ₹2.5 lakh limit at different basic salaries Is EPF withdrawal taxable? EPF withdrawals are tax-free after five years of continuous service. Service with earlier employers counts if you transferred the balance instead of withdrawing it. Before five years, the withdrawal is taxable unless employment ended due to ill health, closure of the employer's business or other reasons beyond your control. Situation Tax treatment TDS 5+ years continuous service (including transfers) Tax-free (except interest already taxed yearly on contributions above ₹2.5 lakh) None Under 5 years, amount ₹50,000 or less Taxable, as below None Under 5 years, above ₹50,000, PAN given Employer share and interest taxed as salary; interest on own share as other income; own share taxed only if a deduction was claimed 10% Under 5 years, no PAN As above Higher rate (20%) Ill health, business closure, causes beyond control Tax-free None TDS on EPF withdrawals is now governed by section 392 of the Income-tax Act, 2025, which replaced section 192A. If your total income is below the taxable limit, you can submit Form 121, which replaced Forms 15G and 15H, to avoid TDS. Report the withdrawal in your return; our guide to choosing the right ITR form (/insights/which-itr-form-to-file) helps. How do you transfer EPF when you change jobs? Your Universal Account Number (UAN) stays the same for life. When you join a new employer, the PF from your old employer should be transferred into the new member ID under that UAN. Since January 2025, most online transfer claims go straight to the EPFO without employer approval; the PIB release of 19 January 2025 (https://labour.gov.in/sites/default/files/pib2094230.pdf) estimated 94% of claims would no longer need employer intervention. Transferring matters for three reasons. It keeps five years of continuous service intact for tax-free withdrawal, it carries EPS service forward towards a pension, and it avoids balances left behind in old accounts. Under the EPF Scheme, 2026, an account becomes inoperative if no claim is made within 36 months of the money becoming payable, for example after retirement at 55, and interest then stops. Steps to transfer EPF to a new employer using UAN under the 2026 rules If you have several old member IDs or even multiple UANs, merge them. Our guide to consolidating scattered investments (/insights/consolidate-scattered-investments-and-policies) covers the paperwork for PF, insurance and mutual funds together. What changed with the ₹25,000 wage ceiling? From 17 September 2026, mandatory EPF coverage applies to employees earning up to ₹25,000 a month, up from ₹15,000, according to the EPFO's PIB briefing (https://www.pib.gov.in/PressReleasePage.aspx?PRID=2314111®=48&lang=2) . Employees previously excluded for earning just above ₹15,000 can now be enrolled. For those earning more, the maximum EPS share of the employer's contribution rises to 8.33% of ₹25,000. Should you use EPF and VPF as your retirement core? For the debt part of a retirement portfolio, EPF and VPF are hard to beat: 8.25% for FY 2025-26, ratified by the government in June 2026 after the CBT's March 2026 recommendation (https://www.pib.gov.in/PressReleasePage.aspx?PRID=2234502®=3&lang=1) , with sovereign backing and mostly tax-free interest. But a portfolio built only on EPF will struggle to beat inflation over 25 years after tax on large balances, and equity remains the growth engine. A practical approach many salaried families use: keep EPF on full basic, add VPF up to the ₹2.5 lakh limit if you want more fixed income, and route long-term surplus into equity through NPS or mutual funds (/insights/nps-vs-mutual-funds-complete-comparison-guide) . Use the retirement calculator (/tools) to check the gap, and see our gratuity guide (/insights/gratuity-calculation-tax-free-limit) for the other employer benefit you will receive on exit. Related reading EPF calculator: how your PF and EPS pension grow (/insights/epf-calculator-eps-pension-guide) Gratuity: formula, eligibility and tax-free limit (/insights/gratuity-calculation-tax-free-limit) PPF: complete guide to returns and withdrawals (/insights/ppf-complete-guide) Tax planning FY 2026-27: old vs new regime (/insights/tax-planning-guide-india) Retirement planning in India: how much corpus (/insights/retirement-planning-guide-india) NRI taxation in India (/insights/nri-taxation-india-guide) Frequently Asked Questions Can I withdraw my full PF amount while still employed? No. While employed, you can make only partial withdrawals, and 25% of your balance must remain as a minimum balance under the EPF Scheme, 2026. Full withdrawal is allowed on retirement after 55, permanent incapacity or permanent migration, or after 12 months of continuous unemployment if you leave a job earlier. How many times can I withdraw from EPF? It depends on the purpose. Education withdrawals are allowed up to 10 times during membership, marriage up to 5 times, housing up to 5 times, and special-circumstances withdrawals twice a financial year. Illness withdrawals have no fixed count. All require 12 months of membership, except where the claim form states otherwise for housing. What is the EPF withdrawal limit without documents? Under the 2026 rules, special-circumstances withdrawals need no reason or proof, and most essential-needs claims need minimal documentation. Advance claims up to ₹5 lakh can be settled automatically within about three days if your Aadhaar, PAN and bank KYC are verified. The amount is still limited to the balance above the 25% minimum. Is VPF interest tax-free? VPF interest is tax-free only while your total own contributions, EPF plus VPF, stay within ₹2.5 lakh in a financial year. Interest earned on contributions above that limit is taxable at your slab rate every year. Withdrawals after five years of continuous service remain tax-free, apart from that already-taxed interest. Is TDS deducted on EPF withdrawal? TDS applies only if you withdraw before five years of continuous service and the amount exceeds ₹50,000. The rate is 10% with PAN and higher without it. Section 392 of the Income-tax Act, 2025 now governs this. If your income is below the taxable limit, submitting Form 121 can prevent TDS. What happens to my PF if I do not transfer it after changing jobs? The old balance keeps earning interest while it remains an active member account, but service periods stay split, which can break the five-year continuity needed for tax-free withdrawal. Once money becomes payable, for example after retirement, an account with no claim for 36 months becomes inoperative and stops earning interest. Can NRIs keep their EPF account? Yes. An Indian who moves abroad can leave the EPF balance invested or withdraw it in full on permanent migration. Interest earned after you stop working may be taxable, and residential status affects how withdrawals are taxed. Our NRI taxation guide explains residency rules. Sources: EPFO: 238th CBT press brief, 13 Oct 2025 (https://www.epfindia.gov.in/site_docs/PDFs/EPFO_PRESS_RELEASES/PressBrief_MOL&EChairs238thMeetingCBT_EPF_13102025.pdf) ; KPMG: new social security schemes 2026 (https://assets.kpmg.com/content/dam/kpmgsites/in/pdf/2026/07/KPMG-Flash-News-New-Social-Security-Schemes-2026.pdf) ; PIB: 239th CBT meeting, 2 Mar 2026 (https://www.pib.gov.in/PressReleasePage.aspx?PRID=2234502®=3&lang=1) ; PIB: auto-settlement limit ₹5 lakh (https://labour.gov.in/sites/default/files/pib2139291.pdf) ; PIB: PF transfer simplified (https://labour.gov.in/sites/default/files/pib2094230.pdf) ; PIB: wage ceiling ₹25,000 (https://www.pib.gov.in/PressReleasePage.aspx?PRID=2314111®=48&lang=2) ; Income Tax Department: Schedule II, Income-tax Act 2025 (https://www.incometaxindia.gov.in/w/schedule-ii-9) . Worked examples are Money n Wealth calculations. Withdraw, transfer or top up with VPF? The right PF move depends on your tax slab, job plans and other savings. Talk to Money n Wealth (/contact) for a free portfolio review. This article is for general educational purposes only and does not constitute financial advice. Figures and examples are illustrative. Please consult a qualified financial adviser for guidance specific to your situation. Money n Wealth (Predics Fintech Services Pvt Ltd) is an AMFI-registered Mutual Fund Distributor (ARN-121995) and APMI-registered PMS Distributor (APRN07444); it is not a SEBI-registered investment adviser and may earn distribution commission on investments made through it.
Frequently Asked Questions
Can I withdraw my full PF amount while still employed?
No. While employed, you can make only partial withdrawals, and 25% of your balance must remain as a minimum balance under the EPF Scheme, 2026. Full withdrawal is allowed on retirement after 55, permanent incapacity or permanent migration, or after 12 months of continuous unemployment if you leave a job earlier.
How many times can I withdraw from EPF?
It depends on the purpose. Education withdrawals are allowed up to 10 times during membership, marriage up to 5 times, housing up to 5 times, and special-circumstances withdrawals twice a financial year. Illness withdrawals have no fixed count. All require 12 months of membership, except where the claim form states otherwise for housing.
What is the EPF withdrawal limit without documents?
Under the 2026 rules, special-circumstances withdrawals need no reason or proof, and most essential-needs claims need minimal documentation. Advance claims up to ₹5 lakh can be settled automatically within about three days if your Aadhaar, PAN and bank KYC are verified. The amount is still limited to the balance above the 25% minimum.
Is VPF interest tax-free?
VPF interest is tax-free only while your total own contributions, EPF plus VPF, stay within ₹2.5 lakh in a financial year. Interest earned on contributions above that limit is taxable at your slab rate every year. Withdrawals after five years of continuous service remain tax-free, apart from that already-taxed interest.
Is TDS deducted on EPF withdrawal?
TDS applies only if you withdraw before five years of continuous service and the amount exceeds ₹50,000. The rate is 10% with PAN and higher without it. Section 392 of the Income-tax Act, 2025 now governs this. If your income is below the taxable limit, submitting Form 121 can prevent TDS.
What happens to my PF if I do not transfer it after changing jobs?
The old balance keeps earning interest while it remains an active member account, but service periods stay split, which can break the five-year continuity needed for tax-free withdrawal. Once money becomes payable, for example after retirement, an account with no claim for 36 months becomes inoperative and stops earning interest.
Can NRIs keep their EPF account?
Yes. An Indian who moves abroad can leave the EPF balance invested or withdraw it in full on permanent migration. Interest earned after you stop working may be taxable, and residential status affects how withdrawals are taxed. Our NRI taxation guide explains residency rules.
Withdraw, transfer or top up with VPF?
The right PF move depends on your tax slab, job plans and other savings. Talk to Money n Wealth for a free portfolio review.
