EPF Rules / PF Rules
The Employees Provident Fund is administered by EPFO under Ministry of labor and Ministry of Finance. It helps employees to save a small part of their salary every month. 12% of basic monthly salary is deducted every month to deposit in EPF account. EPFO is a major long-term saving and retirement corpus for salaried people. Hence, it is best to remain updated on the latest EPF rules and regulations. We have listed here some very basic PF withdrawal rules and PF interest rate. All companies or organizations having more than 20 employees are the member of EPFO. The information here will help you to make maximum use of your EPF account. All salaried persons should be aware of their Provident Fund rules and PF interest rates. Before that make sure you check your EPF balance in advance. If you are contributing to EPF, you can also withdraw your PF in advance. Similarly, you can also avail loans and advances for various reasons.
It is common for working people to change job for better prospects. Hence, you should be updated on EPF rules. While changing job, you can either withdraw or transfer your PF amount. PF withdrawal rules and PF interest rates are major EPF regulations. We have also given valuable information on tax deducted on EPF amount. You can benefit more by staying aware of all EPF rules and regulations. With innovative developments in EPFO procedures, you can withdraw your PF amount without your employer’s signature. Our post on PF withdrawal form also lists all the EFP forms. Moreover, EPF interest rates and EPF withdrawal rules are getting updated every year. The revisions will directly affect your long-term retirement savings.
EPF Rules on Interest Rate: PF Interest Rate Revised
EPF Interest rate is the rate of interest on the amount deposited in EPF account. The PF interest rate for the financial year 2015-2016 was fixed 8.7%. In February 2016, EPFO increased the rate to 8.8 from 8.75 for workers. The trade unions are however demanding for 8.90 EPF interest rate since then. Recently, Finance Ministry has ratified it to 8.7 setting aside EPFO decision.
However, the decision is not yet notified for this EPF rule. All central trade unions are against Finance Ministry’s decision.
PF Withdrawal Rules
As per EPF rules for withdrawal, employees have to submit Form 19 to withdraw PF amount. Here are some major changes in the PF withdrawal rules in the year 2016: You can also download PF withdrawal form from our portal.
EPF Rules for PF Withdrawal
- The retirement age should be at least 58 years to withdraw the full amount of EPF.
- You can withdraw 90% of EPF 1 year before retiring. But the age should be at least 57.
- You can withdraw employee contribution after leaving a job. The employer’s contribution and interest will remain till you are 57. So now you can’t withdraw full Employees Provident Fund amount before 57.
- Since it is not possible to withdraw full amount before 57, your EPF membership does not end with leaving the job. If you leave a job before 57, you EPFO membership will continue. It will continue till you are able to withdraw full amount.
Your Employees Provident Fund is your retirement saving. Withdrawing it before retirement age will negatively affect your savings. Your EPF amount will also remain aloof from a value of compounding. The new PF withdrawal rules save you from using up all the accumulated portion of your Employees Provident Fund. Also get to know tax on PF withdrawal if you are planning to withdraw an amount before 5 years.
While we are writing, the Budget 2016-17 proposal for taxing EPF by 60% is withdrawn. As of today, there will not be any tax on PF withdrawals made at the time of retirement. The PF withdrawal is taxable from 10% to 30% for withdrawal before completion of 5 years. Your provident fund status can also be checked using different ways like sms, mobile, email and UAN number.
Employees Provident Fund is a powerful saving scheme offered by the government to salaried persons. Understanding PF structure and EPF rules will help you to decide on withdrawal when you leave a job. You can transfer your PF account to the new company to preserve your saving. During need, you can also withdraw partial amount or take a loan from your PF amount. We will be bringing more updates and information on Employees Provident Fund. Awareness will surely help you to use the benefits offered by EPFO to all the members. Do not forget to check our posts on EPFO claim status and UAN status. Do drop your queries related to any Employees Provident Fund procedures and EPF Rules.