Blog Post

Government of India, has made a few amendments, related to early withdrawals from the Provident Fund & provisions related to PF withdrawals, initially notified on 10th February, 2016. The applicability of the new withdrawal norms however were deferred from May 1, 2016 to 1st August, 2016 in view of mass protests. The new norms would make it tough for an employee to access the entire amount if you do not meet the criteria set out.

Few takeaways from the latest amendments are shared as under:-

1. Retirement age has been increased from 55 years to 58 years.
2. Full EPF balance cannot be withdrawn before attaining the Retirement Age.
3. Partial withdrawal of EPF amount is allowed if a person is unemployed for two months or more. However he can withdraw only his/her contribution to the PF plus interest accrued on it, before retirement. The employer’s contribution and interest can only be withdrawn after attaining the age of retirement.(58 years)
4. The withdrawal option will be available once you attain 57 years and the entire corpus, instead of 90 per cent, can be pulled out at one go.
5. Woman who quit their job for getting married, pregnancy or childbirth will not have to wait for two months to withdraw. They can do so immediately.
6. Full PF accumulations(Employees + Employer’s share + interest) will be paid to the EPF member only for ;

• The purpose of buying a house.
• Medical treatment – Self / family member suffering from TB, Leprosy, Paralysis, Cancer or Heart operation.
• Marriage of children
• Professional education of children (like Medical/Engineering/Dental).
• If EPF member joins an establishment belonging to or under the control of the Central or State Government and becomes a member of Contributory PF or any old age Pension scheme.

About author Rohini Bhan

Rohini Bhan CFP® is the Principal Advisor at FINART ADVISORY™ and is passionate about spreading the art and science of financial planning. She believes financial literacy is the key for unlocking financial happiness of individuals and the current knowledge level is inadequate across most of the socio-economic classes. Lot needs to be done :)