The Central Government is preparing for a huge change in the rules of the Employees Provident Fund (EPF). Now EPF account holders will be able to withdraw a large part of their deposits or full amount every 10 years. That is, there is no need to wait till retirement now! According to an Economics Times news, the government is seriously considering this proposal of the Employees Provident Fund Organization (EPFO), so that the employed people will be able to withdraw their hard earned money according to their needs.
What is the rule now?
At present, there are only two ways to withdraw the entire amount from the EPF. First, when you retire, ie at the age of 58. Second, if you are unemployed for more than two months. Apart from this, partial withdrawal is allowed only for some special needs, such as buying, treatment, marriage or education of children. But the new proposal can eliminate this strictness.
Youth will get relief?
If this rule applies, people will be able to withdraw their EPF amount even at the age of 30 or 40. However, a government official said that the government may probably fix the withdrawal limit of up to 60% instead of the entire amount. It is still under consideration. This means that young employees will be able to use funds to buy their needs, such as buying houses or starting business.
What is the intention of the government?
According to the government official, the aim of relaxing the EPF rules for some time is that the account holders should be allowed to use their money easily. The proposal for withdrawal is also part of this thinking every 10 years. The government wants people to use their hard earned money according to their needs.
Experts said profit or disadvantage
Some experts are not excited about this change. He says that the real purpose of EPF is to prepare a safe fund for retirement. People can reduce future savings by repeated exemption. Akshay Jain, partner of Saraf and Partners, says, such rules will have to be made very carefully, so that small needs do not be heavy on retirement security.
At the same time, Rohitashv Sinha, partner of King Stubb & Kasiva, believes that this will increase money in the sector like real estate, which will benefit the economy. But they also say that frequent withdrawal can reduce savings for retirement.
IT system may face problems
Experts have warned that EPFO will have to further strengthen its IT system. The existing system is not ready to handle so many withdrawals requests. If there is a disturbance in the system, the risk of fraud may also increase.
Recent changes
EPFO has recently relaxed something else. From July 2025, account holders will be able to withdraw up to 90% of their EPF amount or buy land. Earlier, contribution for 5 years was necessary for this, which has now been reduced to 3 years. Apart from this, the limit of auto-settlement has also been increased from ₹ 1 lakh to ₹ 5 lakh. With this, funds will be available quickly in emergency.
What is EPF?
EPF is Employees Provident Fund, India’s largest retirement saving scheme. In this, both the employees and the employer deposit a part of their salary, on which interest is also available. Its purpose is to provide economic security after retirement. If this new rule applies, then this will be the biggest change in the history of EPF.