To give financial security to the service-class individuals in their post-retirement life, employers are meant to deduct a small portion of the salaries of employees, which is invested into EPF account, enabling the investment to grow at a healthy rate of interest.
Currently, the rate of interest is 8.15 percent per annum.
Employees provident Fund (EPF) subscribers are supposed to contribute 12 percent of their basic pay plus dearness allowance. Out of this contribution, 3.67 percent goes to the EPF account and 8.33 percent towards the pension fund.
There are a number of scenarios in which subscribers are permitted to withdraw an advance from their EPF fund during the tenure of their job.
However, before applying for a withdrawal, known as advance in the context of EPF, it is important that the UAN (Universal Account Number) is activated and the phone number linked to UAN is functional.
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These are some of the key reasons for which EPF withdrawal is allowed.
EPF advance is allowed in these scenarios:
1. There is no unemployment for the past two months
2. There is a lockout of closure of company
3. Marriage of subscriber /son/ daughter/ brother/sister
4. Illness of subscriber or family member.
5. Expenses with regards to marriage and post metric education.
6. Disaster especially during Covid-19.
7. Disconnection of power.
8. Money to buy equipment during disability.
9. After the age of 54 and one year before retirement, subscribers can withdraw 90 percent of your account balance in form of advance.
EPF subscribers can apply for advance (withdrawal) on Umang app.
Additionally, EPFO has introduced a range of changes in the past few years in view of the changing circumstances.
The changes include the following:
1. During Covid, EPFO introduced non-refundable special COVID advance for the subscribers.
2. When EPF subscriber is unemployed for longer than one month, they are entitled to apply for non-refundable advance.
Also, the pension fund body in 2017 introduced a provision of direct benefit transfer (DBT) via digital means for the sake of comfort and ease of subscribers. Besides, it was made compulsory in 2015 to make EPF contributions via internet banking.
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“Don’t withdraw money from your EPF account unless absolute necessary. This is the money for the retirement and you stand to earn maximum interest on this,” says Anil Kumar Pritam, regional provident fund commissioner-I (RPFC-1), RO, Nasik.
So, it is recommended not to withdraw the EPF balance unless it is unavoidable because the corpus is meant to give financial security to subscribers during their post-retirement years.
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Published: 04 Jun 2024, 02:09 PM IST