Restrictions on EPF delayed, to come into effect on August 1
Relaxing the restrictions on contribution to the Employees’ Provident Fund (EPF) announced during the Budget session, the government on Monday said withdrawals under certain categories, including major medical treatments, education and weddings will be allowed.india Updated: Apr 20, 2016 01:36 IST
The central retirement fund body, Employees’ Provident Fund Organisation (EPFO), has deferred the implementation of the new norms till August 1, giving eligible members more time to withdraw 100 per cent of their provident fund (PF) under the old norms.
When the norms do roll out, there will however be no changes to the rules on withdrawal in emergency situations. As was the case earlier, members will be allowed to withdraw the entire amount from their account to fund housing, major medical treatment for oneself and family members, education and weddings.
“The withdrawal norms for emergency situations have not been changed except that we have added professional education like dental and engineering in the category which allows full withdrawal of the PF money,” an EPFO official said.
Following the February budget session, the labour ministry announced changes that restricted 100 per cent withdrawal by members unemployed for two months or more. Instead, they announced that one can withdraw only their contribution to the fund and the interest earned on it, and not the employer’s contribution.
Every month, a salaried individual contributes 12% of their salary to the EPF account and the employer matches this.
The new rules also bar subscribers from claiming their PF after 54 years of age. Members will now have to wait till they turn 57. As per the earlier norms, subscribers were allowed to claim 90 per cent of their accumulations in their PF account at the age of 54 and their claims were settled just a year before their retirement.
The changes were expected to come into effect on May 1, 2016.