EPFO New Withdrawal Rules: The Employees’ Provident Fund Organization (EPFO) has some great news for working people. The rules for withdrawing PF funds have been changed, making it easier than ever before.
You can now partially withdraw up to 100% of the eligible balance in your PF account whenever you need it. The most important and reassuring thing is that this 100% withdrawal will include both your own contribution (share) and your company’s (employer’s) contribution. Previously, the entire company’s contribution was allowed to be withdrawn only upon retirement or job loss. This new change provides employees with greater convenience and flexibility to meet their unexpected financial needs.
This important decision was taken at the 238th meeting of the Central Board of Trustees (CBT). Its primary objective is to simplify the previously cumbersome process of withdrawing funds from PF.
7 major changes in PF withdrawal
1. Withdrawals increased to 100%! If needed, you can withdraw up to 100% of the eligible portion of your total PF balance. This will now include employer (company) contributions as well. This is a huge relief.
2. Previously, there were 13 different rules for withdrawing money, which were very complicated. Now, the EPFO has broken them down into three simple sections:
3. You can now withdraw up to 10 times for your children’s education and up to 5 times for their marriage. Previously, the limit for both was only three.
4. Previously, different withdrawal periods required different lengths of employment. Now, this requirement has been reduced to just 12 months for everyone. This means that even those just starting a new job can withdraw money quickly if needed.
5. In the event of a major disaster or pandemic, withdrawals under the “special circumstances” category don’t require any reason or documentation. This will expedite the claim’s approval.
6. Requirement – 25% Balance Must Be Saved – A new rule requires that you maintain 25% of your total PF balance in your account. This minimum balance is set so that you can continue to earn 8.25% interest and compounding (interest on interest) on your remaining funds, even after using the remaining funds. This is to secure your retirement.
7. Automatic Claims: With simplified rules, 100% partial withdrawal claims can now be processed automatically. This will ensure faster access to funds and eliminate the hassle of document processing.
Why did EPFO change the rules?
– Easier withdrawals: The EPFO says the new rules will make accessing funds easier and allow people to spend wisely. This simply means that when people truly need money, they can withdraw their PF funds without any hassle.
– Resolving Old Disputes: This is a major step. The primary purpose of this scheme is to quickly resolve old PF disputes, such as claims pending for years, through digital means.
Another objective of these changes is to remove the old complexities of the PF system. When the rules are simplified, employees will have no trouble withdrawing their funds.
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