Not many of you may be aware that now you can only partially withdraw the accumulated provident fund corpus before retirement. According to a new rule notified by Ministry of Labour and Employment on February 10, if a person after being unemployed for two months or more, wishes to withdraw money from the EPF account, he or she can only withdraw his or her own total contribution and interest earned on it. The employer’s contribution and the interest earned on it can only be withdrawn after one reaches 58 years of age.
Earlier, if a person was unemployed for two months or more, he or she could withdraw the entire amount (both employee and employer’s contribution and interest earned on it) accumulated in his or her EPF account. So, if you were planning to withdraw money from your EPF account to start your own business before retirement, you won’t be able to withdraw the entire amount but around 50 per cent of it.
The condition is waived off in case of women employee if they leave employment for marriage, pregnancy or childbirth. The notification is however silent on whether the employer’s contribution that will be locked in till the person attains 58 years of age, will earn interest or not.
Categories: Personal Finance