Changes in the EPF Withdrawal Rules from EPF Scheme, 1952

The labour ministry with effect from 10th February 2016 made changes in the Employees’ Provident Fund Scheme, 1952, (“EPF Scheme”) which are mainly related to early withdrawals from Provident Fund (“PF”).

The amendments made to the EPF Scheme are detailed as under:

  1.  Full EPF balance cannot be withdrawn before attaining the retirement Age:
    The EPF contribution by the employer can’t be withdrawn before the retirement. Only at the age of 58 years an employee can withdraw own contribution and interest accrued thereon.
  2.  Continuity of EPF membership:
    Even on resignation from the job an employee continues to be the member of EPF even if you cease to be an employee of EPF under the covered establishment.
  3.  Partial withdrawal of EPF amount on Resignation.
    The retirement age has now been increased from 55 to 58 years and the option of full EPF withdrawal on resignation is not permissible.
  4.  Increase in Age limit to withdraw 90% of PF balance.
    The age limit has now been increased from the current 54 years to 57 years.
  5. Increase of retirement age:
    The age of retirement has now been increased from 55 to 58 years.

The Budget 2016-17 proposal of levying income tax on 60% of EPF balance has been withdrawn by the government. Therefore, no tax will be levied on PF withdrawals at the time of retirement.

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