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As the government set out to provide relaxation for withdrawal of corpus from Employees’ Provident Fund, it met with opposition from protesting trade unions, forcing it to completely withdraw its February 10 notification earlier this week. Within a span of 24 hours, labour minister Bandaru Dattatreya went from keeping the notification “in abeyance” for three months till July 31, 2016 to a complete withdrawal. The notification was originally to be implemented from February 10 but later put on hold till April 30.
This has been the second rollback on the revised EPF withdrawal norms announced in this year’s budget — the government had to earlier scrap its proposal to make 40 per cent of the corpus taxable on withdrawal.
Following are the details of labour ministry notification issued on February 10, 2016, which amended the regulations of EPF Scheme with respect to the age limit for PF withdrawal and provision for early withdrawal.
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Age limit for PF withdrawal
Before amendment: Members could withdraw the full amount in their PF account at the time of retirement after attaining the age of 55 years or they could withdraw up to 90 per cent of their PF accumulations on attaining the age of 54 years or within one year before actual retirement, whichever was later.
After the amendment: The age limit of PF withdrawal increased from 55 to 58 years and as per the revised provisions, members could withdraw the full amount in the PF account at the time of retirement after attaining the age of 58 years or they could withdraw up to 90 per cent of PF accumulations on attaining the age of 57 years.
Provision for early withdrawal
Before the amendment: Members could withdraw their full PF accumulations on the cessation of employment and on not being re-employed with an establishment for a continuous period of not less than two months before making the PF withdrawal application.
After the amendment: The above facility for an early withdrawal was removed by this notification.
Provision for partial withdrawal
It, however, introduced a provision that allowed members to withdraw their own share of PF contributions along with interest earned on their own contribution on the cessation of employment on the condition that they are not re-employed with an establishment which is covered under the EPF Act.
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