Pf-withdrawal

Employee Provident Fund Scheme 2016

Employee Provident Fund Scheme 2016

Recently Ministry of labor and employment has issued a gazetted notification (Download) to amend Employee Provident Fund  Scheme 1952 and will be called Employee Provident Fund Scheme 2016.

One of it is amendment is related to withdrawal of employee’s accumulated funds. We have studied it and brings you changes and insight of this gazetted notification.

1. (A) This Scheme may be called the Employees Provident Funds Scheme 2016.
    (B) It shall come into force on the date of its publication in the Official Gazette.

2. In the Employees’ Provident Funds Scheme 1952 (hereinafter referred to as the said Scheme), in paragraph 26A, in sub-paragraph (1), the Explanation shall be omitted.

3. In paragraph 68-NN of the said Scheme, for the figures and word “54 years” the figures and word “57 years” shall be substituted.

Before

68-NN. Withdrawal within one year before the retirement The Commissioner, or where so authorized by the Commissioner, any officer subordinate to him, may, on an application from a member in such form as may be prescribed, permit withdrawal of up to 90 percent of the amount standing at his credit, at any time after attainment of the age of 54 years by the member or within one year before his actual retirement on superannuation, whichever is later.

Amended

68-NN. Withdrawal within one year before the retirement The Commissioner, or where so authorised by the Commissioner, any officer subordinate to him, may, on an application from a member in such form as may be prescribed, permit withdrawal of up to 90 percent of the amount standing at his credit, at any time after attainment of the age of 57 years by the member or within one year before his actual retirement on superannuation, whichever is later.

Conclusion

The employee will be allowed to withdraw their standing contribution amount after attainment of the age of 57 years instead of 54 years.

4. After paragraph 68-NNN of the said Scheme, the following new paragraph shall be inserted, namely 68-NNNN. Option for withdrawal on cessation of employment.

Amended ( Paragraph added )

(1) The Central Board, or where so authorized by the Central Board, the Commissioner, or any officer subordinate to him, may, on an application made by a member in such form as may be specified, authorise payment to him from his provident fund account not exceeding his own total contribution including interest thereon up to the date the payment has been authorized on ceasing to be an employee in any establishment to which the Act applies.

(2) The member making an application for withdrawal under sub-paragraph (A) shall not be employed in any factory or another establishment, to which the Act applies, for a continuous period of not less than two months immediately preceding the date on which such application is made. Provided that the requirement of two months’ period referred to in sub-paragraph (B) shall not apply in cases of female members resigning from the services of the establishment for the purpose of getting married or on account of pregnancy or child birth.

Conclusion

The first paragraph restricts employees to withdraw only his own contribution (ie EPF and/or VPF) with interest till the date of payment has been authorized.  And as per the second paragraph if the employee can withdraw his own contribution if and only if he is not employed by any company for at least two months. But in case of female resign from the company due to getting married or pregnancy or child birth can withdraw their own contribution even before two months.

5. In paragraph 68-O of the said Scheme, for the figures, letters and the word “68-N and 68-NN” the figures, letters and the word “68-N, 68-NN, 68-NNN and 68-NNNN” shall be substituted.

Before

The payment of withdrawal or advance under paragraphs 68-B, 68-H, 68-J, 68-K, 68-L, 68-M and [68-N and 68-NN] of the Scheme may be made, at the option of the member.

Amended

The payment of withdrawal or advance under paragraphs 68-B, 68-H, 68-J, 68-K, 68-L, 68-M and [68-N, 68-NN, 68-NNN and 68-NNNN ] of the Scheme may be made, at the option of the member.

6. In paragraph 69 of the said Scheme

(a) for the figures and word “55 years” wherever they occur, the figures and word “58 years” shall be substituted

Before

(A) On retirement from service after attaining of the age of 55 years:

Provided that a member, who has not attained the age of 55 years at the time of termination of his service, shall also be entitled to withdraw the full amount standing to his credit in the Fund if he attains the age of 55 years before the payment is authorized.

Amended

(A) On retirement from service after attaining of the age of 58 years:

Provided that a member, who has not attained the age of 58 years at the time of termination of his service, shall also be entitled to withdraw the full amount standing to his credit in the Fund if he attains the age of 58 years before the payment is authorized.

Conclusion

The employee can withdraw their full amount if he resigns before 58 years but attains 58 years before payment is authorized.

(b) in sub-paragraph (1), clause (e) shall be omitted

Before

(e) in any of the following contingencies, provided the actual payment shall be made only after completing a continuous period of not less than [two months] immediately preceding the date on which a member makes the application for withdrawal:

(i) where a factory or other establishment is closed but certain employees who are not retrenched, are transferred by the employer to other factory or establishment, no covered under the Act;

(ii) where a member is transferred from a covered factory or other establishment to another factory or another establishment not covered under the Act but is under the same employer; and

(iii) where a member is discharged and is given retrenchment compensation under the Industrial Disputes Act, 1947 (14 of 1947)] or.

Amended

Paragraph removed

Conclusion

The employee will not be able to withdraw their contribution in above special conditions until they attend previously mentioned criteria. Special conditions previously allowed to employee removed from the scheme.

(c) sub-paragraphs (2) and (5) shall be omitted.

Before

(2) In cases other than those specified in sub-paragraph (1), the Central Board, or where so authorised by the Central Board, the Commissioner, or where so authorised by the Commissioner, any officer subordinate to him, may permit a member to withdraw the full amount standing to his credit in the fund on ceasing to be an employee in any establishment to which the Act applies provided that he has not been employed in any factory or other establishment to which the Act applies for a continuous period of not less than two months immediately preceding the date on which he makes an application for withdrawal. The requirement of two months waiting period shall not, however, apply in cases of female members resigning from the services of the establishment for the purpose of getting married.

(5) Any member who withdraws the amount due to him under subparagraph (2) shall, on obtaining re-employment in a [factory or another establishment] to which the Scheme applies, be required to qualify again for the membership of the Fund and on qualifying for membership shall be treated as a fresh member thereof.

Amended

Removed

Conclusion

Now onwards in any circumstances employee will not be allowed to withdraw full accumulated contribution from EPFO. An employee can only withdraw their own part of contribution ( i.e. EPF ) with interest if they resigned and not employed by any establishment for a continuous period of at least two months.

Download gazetted notification of Employee Provident Fund Scheme 2016

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