19 April 2016 : In the February budget session, the labour ministry had announced restrictions on EPF withdrawal by members who are unemployed for two months or more. According to the suggested changes, the concerned members would be free to withdraw only the interest earned and their own contribution to the fund. The restriction was primarily to curb the withdrawal of the Employer’s contribution.
The new rules have also increased the minimum age requirement for withdrawing EPF from 54 years to 57 years. According to the old norms, members aged 54 years are allowed to claim 90% of their total PF amount and the claims are settled approximately a year prior to their retirement.
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The suggested changes were supposed to be implemented from 1st May 2016.
But in an announcement the Employees’ Provident Fund Organisation (EPFO) has stated that the new norms will be effective from 1st August 2016. The announcement stands to benefit eligible members who now have more time to withdraw the full amount of their Provident Fund. This includes the employer’s contribution.
A salaried individual normally contributes 12% of his salary to the EPF account. The same amount is also contributed by the employer.
The new rules are all set to come into effect from 1st August 2016. The EPFO has however, not modified rules regarding withdrawal of PF in emergency situations. This comes as a big relief for people contributing to the EPF account.