The Ministry of Labour and Employment, Government of India has recently changed norms on EPF withdrawal. As per new rule full EPF withdrawal is not allowed up to retirement age. This change adversely impact individuals who frequently change job and withdraw the EPF amount. Let’s take a look at early EPF withdrawal rules and its impact on employees.
Note – As per latest update EPF withdrawal rules are rolled backed on 19th April,2016.
EPF Withdrawal New Rules
Full EPF withdrawal not allowed till retirement
Old Rule –
As per earlier rule, if a person leaves the job and remains unemployed for 60 days or above, he or she could able to withdraw entire EPF amount. However, now it is not possible.
New Rule –
As per new EPF rule notified on 10th Feb,2016 by the government, full EPF withdrawal is not allowed till retirement age. If a person is unemployed for 60 days and wishes to withdraw EPF amount, he or she is allowed to withdraw his or her own contribution and interest earned on it. The contribution of employer and interest earned on that can be withdrawn only at retirement age 58 years. So, if you want to utilize full EPF corpus for starting your own business before retirement you cannot.
Under new rule of EPF withdrawal exception is kept for female employees resigning from the services for the purpose of getting married or on account of child birth or pregnancy.
Also Read – How to change Mobile number in EPF UAN Account?
EPF membership Continuity
Old Rule –
As per earlier rule one could withdraw full EPF amount after resigning from the job, hence his/her EPF account deemed to be closed on withdrawal of EPF amount.
New Rule –
As full EPF withdrawal is not allowed now, an individual member can continue with same UAN Number after withdrawal of his or her own contribution. EPF membership will continue until retirement age of the member.
Retirement Age
Old Rule –
A retirement age was 55 years as per old EPF rules.
New Rule –
A retirement age as per new EPF rule is 58 years.
Increase in age limit for 90% EPF withdrawal
Old Rule –
You can withdraw 90% of EPF balance on attaining 54 years. One year before your retirement age.
Also Read – How to Verify Aadhaar & PAN at EPF UAN Website?
New Rule –
As per new rule, you cannot withdraw 90% of EPF balance on attaining 54 years. New retirement age is 58 years means you can withdraw 90% of EPF balance only on attaining 57 years of age.
Positive of New EPF withdrawal rules
- New EPF withdrawal rule will now allow withdrawing full EPF amount till retirement age. This will help members to build funds for their retirement, especially to people who never bother about retirement planning.
- A long term availability of funds to the PF authorities might result in better returns for the few members, who does not know how to invest their money.
Negative of New EPF withdrawal rules
- You will not able to use full EPF amount for doing business. Although, you may able to earn more money in business compare to EPF interest.
- Your EPF money will earn fixed interest only. This will impact your retirement corpus amount significantly. A smart investor may like to invest this money in a Mutual fund for earning better returns.
- You will not able to use this money during a hard time after leaving your job.
New Challenges
- As per current rule any EPF account not operated for 3 years become dormant EPF account. After applicability of this rule there will be many such accounts.
- No clarification is given that how EPF department will distinguish between actual inoperative EPF accounts and account with only employer contribution and inoperative.
- The employer contribution towards EPF is very low and may not serve significantly towards retirement savings.
Over to You –
What is your take on this new rule of EPF withdrawal?
Do you think the stringent rule of EPF withdrawal will help you in building your retirement corpus?
Do share your thoughts ideas in the comment section.
Bubali
Bullshit rules…what if a person need money ..and don’t have job if they are working in private companies… Stop cheating people..this is human right…for govt job people it can applicable..not for people who are in private job…stop cheating a middle class family….this private companies can through us anytime…dear govt for your own benifits please stop all these nonsense.
Bidyut
Strongly agreed with you.
ANUP DUHAN
agreed with you.
Venkata Ramanaiah Nalamothu
There is an online petition going against the unjustified
EPF withdrawal rule. Please sign and share the below petition. In fact I
have tweeted Srikanth Reddy also to share the petition details in his
blog.
Sign it at change dot org why should we wait till 58 years to withdraw Employee Provident Fund
Thomas
If and only if the Government can provide job security for all employees immaterial of whichever sector they work, public, private, government, and if they can sustain an individual during non-employment then this rule makes sense. Else it does not make any sense. Anyway the salaried class are very highly taxed with meagre benefits.
Shailendra
All useless uneducated people ruling the state and country just by doing these kind of cheap rules. Problem is we are still quite when they are looting our money infront of our own eyes. If middle class people like us know how to make black money like people who does
These rules, we wouldn’t have cared about your damn EPF. If we dont clean this system, these people will shit on our savings and finally they say we can’t give that money till you die.
shame on you and your rules.
Pawan singh
Govt has an outlook to create a pensioner society, however other factors and parameters also needs to be considered. Are they providing housing facilities, unemployment wages, any provision of minimum wages?
The move is only to capute soft money to cut on their fiscal deficit and adhere to FRBM targets.
My advise is that there should be 360 degree review and parallely work on all parameters and not harm only the service class and let away the business class with 9000cr loans !!
ramesh
These kind of rules should be for govt. employees who enjoys all kind of benefit from the govt till their retirement,
not for the people in private jobs . when we do not have job guarantee there is no sense in holding our EPS money especially the employees who work on contract basis in private sectors, shame on the BJP govt. who wants to run their govt with public money till the next election 2019
Vinay
This changes are horrible.. and getting worst.It clearly shows how easily they can swipe our savings. How is this helping, I wonder. People please help to make changes to this new change.
Haari
This new rule is absolutly not acceptabe by any of the employee who works with private sector as in most of the cases they wont work till age of 58 . If a person in need of money for his health issue/family problems how he/she can fullfull his/her needs. Please withdraw this bull shit rule, they are trying to make us fools.
Sree vamsee krishna N
This is very hard decision from government. People in hard situations must have access to PF amount.
Devi prasad parida
Bullshit system plzzz stop it and change the rules. If emergency time we can’t use our money then what the value..we can get more profit in bussines and fix deposit then why should we are wait for 58 age..in our 58 age money value will be change
Deepak
well said….
Govt bring such rules so that they can make use of our money. The interest we will get will be way less than the inflation rate. What if we need this money now because we can invest it in business or any other important thing.
Laxman
The new withdrawal rules must be immediately scrapped. People are loosing trust in this govt.
There are two points I wish to make-
1. No retrospective rule changes allowed – that is nothing but cheating. Until Feb 2016 all EPF members thought and saved according to old rules now suddenly rules cannot be changed retrospectively. whatever, the government must do is for the future.
The argument that EPF members will withdraw and blow up the EPF corpus if they are allowed early withdrawal is nonsensical. What if the person blows off all EPF corpus after 58 years of age? Is the government then going to give him / her a pension? In what way the government is concerned how people spend their EPF money.
Government must stop playing dad and must stop considering us kids. If they want to play dad then they must give the entire EPF corpus again to us when we blow it up as kids.
The real reason is government is finding the EPF kitty very tempting. They want to rob EPF members of their money and so the 58 year rule. Next year the withdrawal age will become 100 years thereafter 500 years. So, EPF members never get their money at all.
karthi
People please stay against this new rule, This issue should go viral. BJP down down
uttardas
please all of epf share holder make oppose of this rule……let’s make it viral. ..Modi & BJP DOWN DOWN. …..
Deepak
Govt create such rule to use our money for their interest.
Pity sitaution.. employers add their contribution in the CTC and show it to us.
Normally people leave jobs either they want their own business or they’re thrown out of job or incapable of doing job. In both the case they need money immediately.
Now lets consider these two situation post retirement.
If my business runs very well, this money will be of very less important to me.
If I remain without job or without any income, even this money will not suffice as the inflation rate would be much much higher than now..
If govt actually thinks about common people, they should abandon such rules and people should be able to withdraw complete amount of theirs.
R Balaji Rao
The new EPF rule will not help common people. This rule will help only government employees not private company employees. How blindly the government can decide the rules without taking common people suggestions .This is our own money we have a rights to with draw it any time and it is our privilege also. Government cannot stop our privilege like that. If middle class people does not get their money in right time for the purpose they may die. Most of the people habitual to keep hopes on the PF amount to fulfill their needs. If their needs not fulfilled in right time, what they do? they may face serious situation. Please re look and make the suitable rule.
narayanaswamy
Has someone suggested in the group, if Govt take care of employee (Govt/Private sector) when he lost job that time it make sense , otherwise how govt can take decision on our money with out offering benefit.
Somanath
It is just a another way to help corporate world. We never expected this kind of foolishness from so called intellectuals. We have appreciated many steps which govt has taken. But it doesn’t mean that we should accept everything……
Govt need review it proposal towards New PF rules….
Soumya
This rule should not come for employees working in Private companies… Those who need money in their difficult times after leaving job will have to face the situation adversely…. So, it is sure that common man is affected due to this.
T kameswar Rao
sir, this is T kameswar rao, i worked in shriram chits private limited, 10 years, 6 month. 11-3-2005 to 19-10-2015.
I am withdrawal PF amount. form 10c applicable pension scheme eligible sir. I got Govt job 12-11-2015. So i
want to remove pension amount. Sir, pls tell me how to I remove cell 9030472381
Raviraj Parekh
Dear Rao,
You want to withdraw your EPF amount partially? if yes for what purpose. Your question is not so clear.
Sudha
Please withdraw this bullshit New pf rules. Worst government. Trying to rob our money. Instead they can beg.
Meraj
This is India and every government is making us fool easily. ..There is nothing wrong because we salaried and tax payers are the bloody fool that politicians are digging our *****….. and we say they are great. …
RAJAMANICKAM
Is TDS applicable, if I withdraw the EPF after the age of 58
Raviraj Parekh
Dear Sir, No tax is applicable on EPF at the time of retirement.
Govind
This gov.is simply looting the poor people of this country by implementing these kind of rules.What if a person is fired from a job and is unable to find a suitable job for many months, does this gov.have any plan to sustain his /her financial problem, NO, No way.Then how they can keep their hard earned money for their own benifit when the poor person and his children are dying of want of money.This is a well thought plan of this greedy gov.to loot the poor people.If this gov.really wants to help the poorest then this new rule shd be changed asap.
Raviraj Parekh
Dear Govind, This new rule is now withdrawn by the government.
shivaprasad1980
Yes the new Rule will certainly help the people
each persons Provident fund money itself will be
used to bury them when they die without money and
it will prohibit all those who would be eager to do business
with their saved amount ,and later after they die struggling
their family will adopt the struggle by going to pf Office with
death certificate of the person to claim the amount