New EPF Rules | Fusion - WeRIndia

New EPF Rules

New EPF Rules

The Employees’ Provident Fund Organization (EPFO) revised many rules related to withdrawal from the Provident Fund (PF) account.

EPF is a scheme that intends to help salaried employees to contribute to the scheme to be used after their retirement. In other words, it is a retirement savings scheme. Hence money from the EPF account cannot be withdrawn during employment except under certain circumstances.

Both employee and employer contribute specific amounts to the EPF account.

Here are some important things to know about EPF withdrawal:

If the UAN and Aadhaar card of an employee is linked, then he/she can withdraw money directly to the bank account, without waiting for the approval of the employer. Moreover, it is mandatory to link UANs of EPF account holders with their Aadhaar card numbers.

Employees can withdraw 90% of the EPF corpus only after attaining the age of 54 years.

An employee can withdraw 75% of the EPF amount if unemployed for one month. They can withdraw the remaining 25% after the second month of unemployment.

TDS at the rate of 10% is applicable on premature withdrawals if the amount exceeds ₹50,000. If you do not provide PAN, the applicable TDS is 30%.

EPFO made e-nomination mandatory for all EPF account holders. This service can be availed online. One can change the name of the nominee several times. The latest nominee given by the account holders will be treated as their nominees.

Those who contribute more than ₹2.5 lakhs to their EPF accounts will have two separate PF accounts, as per the latest CBDT notifications. It will be effective from April 1, 2022. The contributions made up to ₹2.5 lakhs will be kept in the first account. The excess contribution made above ₹2.5 lakhs will be kept in another account, and the contribution, interest etc., are taxable.

Image by Aniket Sadekar from Pixahive (Free for commercial use / CC0 Public Domain)

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