EPFO: The central government is preparing to make the rules of Provident Fund (PF) easier for employees. Their effort is to enable employees to withdraw more money from their PF account as per their needs.
Currently, money can be withdrawn from PF only for certain reasons, such as treatment of illness, buying a house, children’s education or marriage. In these also, one cannot withdraw more than a fixed limit.
New proposal: The government is thinking of allowing an employee to withdraw a large sum (maybe up to 60% to 70%) from his PF account at one go if he works for 10 years continuously.
Three chances: With the introduction of this rule, an employee will be able to withdraw such a large amount three times during his entire job. Suppose someone starts a job at the age of 25, then he will be able to withdraw this amount at the age of 35, 45 and 55.
What are the rules now?
Nowadays, most of the money deposited in PF can be withdrawn either two months after leaving the job, or on retirement at the age of 58.
Who will benefit?
About 7.5 crore (7.5 crore) employee-members of EPFO (Provident Fund Organization) will be able to benefit from this new rule. They will be able to get more money when needed.
But… there is a big disadvantage too
Retirement money will be less: If employees withdraw large amounts from PF intermittently, then it is obvious that when they retire, there will be less money left in their account.
Disadvantage of interest: PF is a means of saving for a long time and getting good interest on it. Withdrawing money in between will reduce the benefit of compound interest. This means that your deposited money will not grow as fast.
Future worries: The financial security that PF provides after retirement may be weak.
The government is going to allow you to withdraw more money from PF if needed, so that your problems can be eased. But remember, by doing this, less money will be left in your account at the time of retirement and you will also get less benefit of interest. That is, you should decide to fulfill today’s needs keeping in mind the security of your future.
Easy way to withdraw money from PF (online):
1. Login: Visit the EPFO website (www.epfindia.gov.in/). Login by entering your UAN (Universal Account Number) and password.
2. Update KYC: Make sure your Aadhaar, PAN and bank account details are linked with UAN and verified.
3. Select Form: Go to the Online Services section and select the correct form as per your requirement (e.g. Form 31 – for partial withdrawal, Form 19 – for final settlement).
4. Fill in the details: Fill in the form with the reason for withdrawal and the amount you want to withdraw (for Form 31).
5. Submit: Click on ‘Apply’. An SMS will be sent to your registered mobile number.
6. When will the money arrive: Usually the money reaches your linked bank account within 15 to 20 working days.
