look news india
The Employees’ Provident Fund Organization (EPFO) has made the most revolutionary reforms ever in its rules for the convenience of crores of employed and salaried employees of the country. The main objective of these new rules is to end the paper hassles related to PF forever and to make the future (retirement fund) of the employees more secure and stronger.
Recently, in a special show of CNBC-TV18, well-known financial experts of the country have explained these major changes made by EPFO in very simple words. Let us know how these new rules are going to affect your pocket and savings.
5 biggest and important changes in EPF and EPS
1. 13 types of complex hassles are over, now only 3 simple categories
Under the old rules, there used to be 13 different reasons, forms and conditions for withdrawing advance money from PF, due to which the common employee got confused. Now EPFO has ended all these and only 3 Main Categories Have made:
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First: Serious illness or medical emergency.
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Second: Children’s education (higher education) and marriage.
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Third: Construction/purchase of home or other special needs.
Now taxpayers will not have to go to offices or follow different rules for any advance.
2. Advance will be available even after working for only 1 year
Earlier, there used to be a strict condition of working continuously for many years to withdraw advance from PF. It has been made very liberal in the new rules.
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12 Month Rule: Even if you have completed only 12 months (even 1 year) of your job, you can withdraw advance money from your PF fund in case of any emergency.
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Limit relaxation: In addition, employees are provided maximum financial assistance for the higher education of children. 10 times And for marriage in the family 5 times Open liberty has been given to take advance up to Rs.
3. 25% balance will always be locked for retirement (Lock-in)
It has often been seen that people empty their entire PF fund as soon as they change jobs or when there is a financial crisis, due to which they become insecure in old age. A strict brake has been put on this in the new rule.
According to financial expert Karthik Jhaveri: “Now your total PF balance 25% always reserved (locked) Will remain. You will not be able to withdraw your entire deposit as advance even if you want to. This step has been taken so that when an employee retires at the age of 55-60 years, he is left with a respectable and sizeable amount of money in his hand.”
4. New formula for withdrawal of money on job loss
If for some reason you lose your job, EPFO has prescribed the withdrawal mechanism as follows:
5. New screw on pension (EPS) withdrawal; 36 months wait
Personal Finance Expert Harsh Rohra Told that the government has also made a major change in the rules of the Employee Pension Scheme (EPS). Earlier the rule was that pension money could be withdrawn only after 2 months of leaving the job. But now for withdrawal from pension fund the employees At least 36 months (3 years) Will have to wait for the inevitable. The clear objective of the government is that people do not break their pension fund midway and can avail the real benefit of monthly pension in old age.
Superfast digital upgrade: money will come to bank account in 3 days
On the technical front, EPFO has completely automated its system:
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Settlement in 3 days: Claims for illness, education or marriage without any human intervention within 3 days The money will be directly credited to your bank account.
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Limit of ₹5 lakh: All claims up to ₹5 lakh will now be ‘auto-settled’ by the software.
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Freedom from canceled cheque: The biggest relief is that now the mandatory requirement of uploading the scanned copy of canceled check or bank passbook while filling the online claim form has been abolished forever.