New EPF Withdrawal Rules

Providing big relief to the salaried class, the government has rolled back the proposed employee provident fund withdrawal tax. But not many of you may be aware that now you can only partially withdraw the accumulated provident fund corpus before retirement.

According to a new rule notified by Ministry of Labour and Employment on February 10, if a person after being unemployed for two months or more, wishes to withdraw money from the EPF account, he or she can only withdraw his or her own total contribution and interest earned on it. The employer's contribution and the interest earned on it can only be withdrawn after one reaches 58 years of age.

Earlier, if a person was unemployed for two months or more, he or she could withdraw the entire amount (both employee and employer's contribution and interest earned on it) accumulated in his or her EPF account.

So, if you were planning to withdraw money from your EPF account to start your own business before retirement, you won't be able to withdraw the entire amount but around 50 per cent of it.

The condition is waived off in case of women employee if they leave employment for marriage, pregnancy or childbirth.

The notification is however silent on whether the employer's contribution that will be locked in till the person attains 58 years of age, will earn interest or not. As according to current rules, a provident fund account becomes dormant or inoperative if no contribution has been made for a period of 36 months. No interest is paid on such dormant account. more  

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Hi Naveen, thanks for update. While we need to know how account will be treated for no contribution, we need to look at government decision from other direction. Many times people tend to withdraw their hard earned money for personal reasons like business, education, marriage etc. Eventually they are left with no money for their old age. I have seen in Singapore old age Gents & Ladies doing housekeeping jobs in food courts due to less / no money for survival. (One will have to read Singapore's history to understand more) As a result Singapore government forces overall 33% contribution in CPF with stringent rules around withdrawal. (11% from Employee & 22% from Employer) Hope our government is also thinking from benefit of people rather than fund benefit. more  
True Anurag & Anitha, any how good information Naveen. more  
*for (generalise the rule for eveyone) more  
I think we should seriouisly appose this, any person who is not working should be allowed to withdraw their PF amount which is part of hard earned money with interest as well, how can the goverment generlaise the rule of everyone, a person irrespective of male/female may need the money well before the retirement for any personal reasons.... more  
is there a way that we can express our concerns and oppose the same? more  
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