Skip to main content

PF Withdrawal May be Capped at 75%

By
FOR SECURITY SAKE Move to retain the worker in PF net and ensure that the money saved is used only in case of dire need
The government is planning to put a cap on premature withdrawal of provident fund (PF) money.The move is aimed at ensuring social security for workers in old age.
The Employees' Provident Fund Organisation (EPFO) has proposed that an employee be allowed to withdraw only 75% of the overall kitty, instead of 100% as permitted under the existing Employees' Provident Funds Scheme, 1952, in case of resignation from a job or for any other use before retirement.
The change, once implemented, will impact working people who tend to withdraw PF money between jobs or those planning to use it for either buying a house or for paying medical bills or for children's higher education or weddings. Pre-mature withdrawal before retirement on these counts as well would also be restricted to 75% of the overall amount.
“The provision of 100% withdrawal at any time is being misused to a large ex tent. The idea of a PF account is to ensure social security for workers in old age,“ central provident fund commissioner KK Jalan said on Monday on the sidelines of Digital India Week celebration by the EPFO. The idea is to retain the worker in the PF net and ensure that the money saved under the PF account as social security for old age is used only in case of dire need and not as a savings bank account.
Of the 13 million annual claims pending with the EPFO, over 6.5 million claims are for 100% withdrawal.
The proposal, which is seen as a reverse move happening for the first time in the history of the EPFO, is pending with labour ministry and once approved it could be implemented by a simple executive order outlining changes in the EPF scheme.
“If we continue allowing 100% withdrawal under various categories, which are generally planned events, it will defeat the purpose of retirement savings,“ Jalan said. According to Jalan, the labour ministry is keen on the idea and hence a notification to this effect could be in place within this month. If implemented, it could bring down the number of claims annually to just 5 million.
The proposal, however, has not gone down well with trade unions. “It is our money and not a single penny is contributed by the government, Hence, we should be allowed to withdraw the full amount as and when required, in the absence of which the government should compensate with higher minimum wages,“ Ashok Singh of Indian National Trade Union Congress said.
EPFO, under the aegis of the labour ministry, has rolled out Universal Account Number programme for all contributing members wherein each subscriber is allotted an account number that acts as an umbrella for multiple employments of a member. This helps the EPFO track members even after job switches. It also helps employees track their account as well as claim withdrawal or transfer online without the interference of the employers.
The Economic Times, New Delhi,7th July 2015

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more