EPF Scheme 2026: Why you must keep 25% of your PF balance before retirement
The Employees’ Provident Fund Scheme, 2026 has introduced a significant change to the way Employees’ Provident Fund (EPF) members can access their savings during service.
Unlike the earlier framework, the new scheme requires members to retain at least 25% of their accumulated EPF balance after making a partial withdrawal. This means members can withdraw only their “eligible member balance”, which is calculated after setting aside the mandatory minimum balance.
The provision forms part of the Employees’ Provident Fund Scheme, 2026, notified by the Ministry of Labour and Employment under the Code on Social Security, 2020.
What is the new 25% minimum balance rule?
The new scheme introduces two important definitions.
First, it defines Minimum Balance as 25% of the total amount standing to a member’s credit, including both employee and employer contributions and the interest accrued on them up to the date of withdrawal.
Second, it defines Eligible Member Balance as the balance remaining after deducting this mandatory minimum balance. This is the amount available for partial withdrawals, subject to the conditions prescribed for different purposes.
In effect, while a member remains in service, at least one-fourth of the accumulated EPF corpus generally remains locked in the account and continues to earn interest.
How does this differ from the earlier EPF Scheme?
The Employees’ Provident Fund Scheme, 2026 also simplifies the withdrawal framework.
Instead of multiple provisions governing advances under the 1952 scheme, the new framework groups withdrawals into three broad categories and allows members to withdraw up to 100% of their eligible member balance for specified purposes after completing the prescribed membership period. These include medical treatment, education, marriage, housing and other notified purposes.
The minimum balance requirement applies only to partial withdrawals during service.
The restriction does not apply to final settlement claims, such as retirement after attaining the prescribed age, permanent and total incapacity, or other circumstances where the scheme permits full withdrawal of the provident fund balance. In such cases, members can withdraw the entire amount standing to their credit, subject to the conditions laid down in the scheme.
What does this mean for EPF subscribers?
The new framework changes the way members access their provident fund during employment.
Earlier, members could exhaust a substantial part of their EPF savings through successive advances if they met the prescribed conditions. Under the new scheme, every partial withdrawal must leave behind a minimum balance equal to 25% of the accumulated corpus.
As a result, a portion of the retirement savings remains invested in the EPF account and continues to earn annual interest until final settlement, while members can still access the remaining eligible balance for specified needs.
