Indian Govt. retroactively changes EPF withdrawal rules severely limiting usefulness
In an unpredictable and unprecedented move, the Indian Govt. has retrospectively revised rules relating to EPF withdrawals which are sure to cause angst and anger among the salaried citizens of the country. The rules make it much harder for employees to use their funds before retirement and even go ahead and prohibit the withdrawal of all the funds before the age of 58.
Change 1 : No full withdrawal at the age of 54 :
“Now, the subscribers will not be able to claim their provident fund at 54, as earlier. They will have to wait till they are 57. The ministry has notified the new rules,” an official said.
Change 2 : Only partial withdrawal now allowed
Earlier employees could withdraw all of their EPF if they so desired. Now the govt. has put in a restriction that employees may only withdraw their portion of EPF and corresponding interest. Employer’s portion of EPF principal and interest cannot be withdrawn before 58. This kind of restriction is unprecedented where you cannot even withdraw the money even if you are willing to pay a penalty.
There are a few other minor changes, but there are the most major changes notified by the ministry and are extremely unfriendly to employees who may have a big expense coming up, those who want to use their savings to start a business or those who might be relocating abroad. The Indian Govt. just doesnt seem to care about its citizens. So much for Ache Din ! Worse is that there is no grace period to withdraw your money, the rule applies retrospectively paralyzing all withdrawals.