Buckling under pressure from trade unions and violence in Bengaluru over the restrictions on withdrawal of Provident Fund (PF) corpus, the government on Tuesday rolled back the notice that introduced these measures.
The labour ministry on Tuesday said, “Considering the representations received from various quarters and after consultations with the various stakeholders, the government has decided to withdraw the February 10 notification with immediate effect.”
Here is a look at what the present rules permit you to do with your money.
Age limit
Then: You could only withdraw your savings when you turn 58.
Now: The age limit to withdraw 90% of the amount is now 54. The rest can be withdrawn on turning 58.
Withdrawal cap
Then: You could only draw out the employee’s contribution to the fund, along with the interest. The rest of the corpus would have been settled on turning 58.
Now: If you have been jobless for over two months, you can now choose to withdraw the entire amount along with the interest. However, if the employee chooses to withdraw before completing five years of continuous service, do not forget to settle the income tax.
Taxation of 60% on withdrawals
Then: In the Union Budget of 2016, Finance Minister Arun Jaitley had said that withdrawals in EPF could avail a tax exemption on 40% of the corpus which meant that 60% of the corpus withdrawal would be taxed at the time of retirement.
There were widespread demonstrations in the country to take back the taxation rule.