The central government is gearing up for major changes in the Employees' Provident Fund Organization (EPFO). According to sources, as per the draft of EPFO 3.0, consideration is now being given to enable employees to withdraw PF funds directly from ATMs.
It is believed that this facility may start from June next year, but only a fixed amount can be withdrawn through it. This would mean that the employee would be able to withdraw money for emergencies, but still have enough money in the account after retirement.
At the same time, increasing the current 12% employee contribution to EPF is also under consideration. Currently an employee contributes 12% of his basic salary, dearness allowance and retention allowance, of which 8.33% goes to the Salary Pension Fund and 3.67% to the EPF.
Employees can also increase their contribution to the pension scheme
- The Central Government has also prepared a proposal for changes in the Pension Scheme (EPS-95). Under this, employees will also be able to increase the currently applicable 8.33% contribution.
- There will be no change in employer's (company's) contribution. He has to pay this in proportion to the salary of the employee.
- Employees can get the facility to top up the contribution and pension fund at any time.
- The portal will be made more interactive to make the employee aware of the PF facilities.
- EPFO 1.0: Accounts were maintained manually. Application and withdrawal were done through paper process.
- EPFO 2.0: EPFO has gone digital. Online portal facility. The employee received a Universal Account Number (UAN).
After leaving the job, you can withdraw 75% of your PF money after one month. Under the PF withdrawal rules, if a member loses his job, he can withdraw 75% of the money from the PF account after 1 month. This enables him to meet his needs during unemployment. The remaining 25% deposited in PF can be withdrawn two months after leaving the job.
PF Withdrawal Income Tax Rules If an employee completes 5 years of service in the company and withdraws PF, there is no income tax liability. A period of 5 years may also be by combining one or more companies. It is not necessary to complete 5 years in the same company. The total duration should be at least 5 years.
If the employee withdraws more than 50 thousand rupees from the PF account before completing 5 years of service, he has to pay 10% TDS. If you don't have PAN card then you have to pay 30% TDS. However, no TDS is deducted if the employee submits Form 15G/15H.
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