The government is implementing significant reforms through the EPFO 3.0 project, with plans for these changes to take effect by next year. The central government aims to revise the Employees’ Provident Fund Organization (EPFO) rules.
The introduction of EPFO 3.0 is expected to resolve numerous issues EPFO members face. In addition, several new facilities will be launched, benefiting millions of private sector employees nationwide.
According to various media reports, the EPFO 3.0 initiative will remove the 12 percent contribution limit set for employee provident funds.
Employees will now have the flexibility to contribute based on their savings. However, the employer’s contribution will still be determined by the employee’s salary, meaning there will be no additional financial burden on employers.
Furthermore, EPFO members can soon withdraw funds from their provident fund accounts via ATM if necessary. The Labour Ministry is reportedly in the process of issuing a card to facilitate this service.
This ATM withdrawal facility for EPFO members is anticipated to launch by May or June 2025, offering significant relief to EPFO users. However, members can withdraw only up to 50 percent of their provident fund through the ATM.
In early November, reports suggested that the government plans to raise the salary ceiling under the EPF scheme to Rs 21,000. This follows an increase made ten years ago, in 2014, when the government raised the salary limit from Rs 6,500 to Rs 15,000.
Withdraw PF Money Using Debit Card: EPFO’s New Initiative
Almost everyone who works has a Provident Fund (PF) account. Both the employee and the company contribute money to the PF each month.
The Employees’ Provident Fund (EPF) operates under the oversight of the Central Board of Trustees (CBT), and the Employees’ Provident Fund Organisation (EPFO) is continually adopting new technologies.
Recent news indicates that the Provident Fund is preparing to implement a significant change. By July 2025, EPFO subscribers can withdraw money from their PF accounts using a debit card, similar to withdrawing cash from an ATM. However, the amount that can be withdrawn will be limited.
This system could help employees save for retirement more effectively by allowing withdrawals only in emergencies. These initiatives are part of the government’s ambitious EPFO 3.0 plan to provide greater control over employee savings.
Under EPFO 3.0, the current 12% limit on employee contributions to the PF could be removed. This change would allow employees to contribute according to their savings goals, enabling them to accumulate a larger fund by depositing higher amounts into their PF accounts.
Furthermore, the employer’s contribution will be based on the employee’s salary. Currently, employees are required to deposit only 12% of their basic salary into the PF; however, under EPFO 3.0, employees would have the option to contribute more.
The reforms associated with EPFO 3.0 are expected to be officially announced in early 2025, although there has yet to be an official confirmation.