The reliable source of income during retirement stage is PF. If one doesn’t withdraw PF during their career, they can enjoy a stress-free life after they retire. But for any reason, if the PF is withdrawn, ensure that you invest in the best returns. To withdraw PF, there are some rules that need to be followed.
To withdraw your EPF, you need to fill up Form 19 (which can be downloaded from www.epfindia.org) and submit it with your previous employer. With the Form 19 duly filled in, signed and attested by the former employer, you need to submit this along with other documents, such as resignation acceptance letter or relieving letter and a cancelled cheque of your bank account, to the EPFO of your jurisdiction.
However, there are the new rules by the government which are supposed to be implemented on April 1st 2016 which is now changed to August 1 st 2016.
Here is the brief description about the existing rules and to be implemented rules.
|Existing Rule||Modified rule|
|You can withdraw both employee’s and employer’s contribution.||You can only withdraw employee’s contribution and the interest accrued on it.
The employer’s portion can be withdrawn after the retirement age.
|After the full withdrawal of PF amount, you are no more a member of EPF Scheme.||Since you cannot withdraw the whole amount, you remain to be the member of EPF Scheme.|
|Retirement Age – 55 years||Retirement Age – 58 years.|
|Minimum balance amount in the PF account – Rs. 30,000.||Minimum balance amount in the PF account – Rs. 50,000.|
|Withdrawals are not taxable||Withdrawals are taxable if you withdraw within five years of joining.|
The modified rules are advantageous for anybody who has no plans for post-retirement. But those who want to start a new phase in life say, starting a new business or buying a new house or performing a marriage, cannot depend on the complete withdrawals of PF. Which in a way is a boon and also a bane.
For more details about PF, refer the below links.