The central government has replaced the decades-old Employee Provident Fund Scheme of 1952 with EPF Scheme 2026, effective June 29, introducing a significant change to how much of their provident fund savings employees can access at one time. Under the new rules, a mandatory minimum balance of 25 percent must remain in the account — meaning from a total eligible balance of Rs 1 lakh, a subscriber can withdraw a maximum of Rs 75,000.

The rule applies to both the employee's and the employer's contributions combined. The "eligible member balance" under the scheme's definition includes both portions, and the 25 percent floor is calculated on that combined total.

The rationale behind the cap is straightforward. The government wants to ensure that employees do not drain their retirement corpus during their working years for short-term needs, while still allowing them access to funds during genuine emergencies. EPFO subscribers can continue to make partial withdrawals for housing — including buying a flat, purchasing a plot, constructing a home, repaying a home loan, or carrying out repairs — as well as for medical treatment, education, and marriage.

Importantly, monthly contributions and take-home salaries are unaffected. The new rule only comes into play when a subscriber applies for an advance or partial withdrawal from their accumulated fund.

For employees with less than 12 months of service, revised provisions have also been included that allow partial withdrawal under specified conditions — a departure from earlier, stricter rules. Officials say this flexibility addresses situations where employees exit jobs early and need access to their saved funds.

The 25 percent minimum balance requirement reflects a dual concern — giving workers financial flexibility in the short term while protecting the retirement savings function that provident fund was originally designed to serve. With EPFO's subscriber base running into crores, the policy shift is likely to affect a large section of the salaried workforce across India.

For those looking to make a withdrawal, the process runs through EPFO's unified member portal using UAN login credentials, Aadhaar-based OTP verification, and submission of Form 31 for partial advances.