New Delhi: In a major boost to ease of living for salaried employees, EPFO subscribers will soon be able to withdraw their provident fund directly into their bank accounts using UPI, eliminating the need for lengthy claim processes. The new system is expected to go live by April, a senior government source told PTI.

Under the proposed mechanism, members will be able to view their eligible withdrawal amount and transfer funds instantly using their UPI PIN, ensuring fast and secure transactions. Once credited, the money can be used freely for digital payments or ATM withdrawals just like any regular bank balance.

Currently, EPF members must submit withdrawal claims, which can take several days to process. While auto-settlement already allows claims to be approved within three days, the new UPI-based system aims to eliminate claim filing altogether, significantly reducing delays and administrative burden.

The Employees’ Provident Fund Organisation (EPFO) is finalising software upgrades to ensure smooth implementation of the facility, which will benefit nearly 8 crore subscribers across India.

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How the New EPF withdrawal system will work?

A portion of the EPF balance will remain frozen to protect retirement savings, while a large part will be made available for instant withdrawal. Members will be able to see the withdrawable amount in real time and transfer it directly to their Aadhaar-seeded bank accounts through UPI.

Since EPFO does not hold banking licences, direct withdrawals from EPF accounts are not permitted, but the new system bridges that gap by routing funds instantly into bank accounts.

Higher auto-settlement limit and simplified withdrawal rules

The government has already raised the auto-settlement limit to ₹5 lakh from ₹1 lakh, allowing faster withdrawals for purposes such as illness, education, marriage and housing.

In October 2025, the EPFO’s apex body, the Central Board of Trustees (CBT), approved sweeping reforms to simplify partial withdrawals. Thirteen complex rules have been merged into a single framework covering essential needs, housing needs and special circumstances.

Members will now be able to withdraw up to 100 per cent of their eligible balance, while maintaining a mandatory minimum balance of 25 per cent, ensuring continued retirement savings growth at EPFO’s current interest rate of 8.25 per cent per annum.