In a recent update, Union Labour Minister Mansukh Mandaviya announced a significant change for employees who use the Employees’ Provident Fund (EPF) in India. Starting now, EPF subscribers can withdraw up to ₹1 lakh at once from their accounts. This is a big jump from the previous limit of ₹50,000. This change aims to make it easier for workers to access their savings during times of need, such as for medical expenses or weddings.
The increase in the withdrawal limit allows employees to take out more money in one go. This adjustment comes in response to changing living costs and higher expenses that workers face today. Previously, the limit of ₹50,000 was considered outdated and did not meet the needs of many people. The government has raised the limit to ₹1 lakh to help employees manage their financial needs better.
In addition to raising the withdrawal limit, the government has also made it easier for new employees to access their EPF funds. Now, even if you have not been with your current job for six months, you can still withdraw money from your EPF account. This change is aimed at providing more flexibility to workers who may need to use their savings before reaching the six-month mark.
Another major update is that organizations that previously operated their own retirement funds can now switch to the EPF system. This applies to businesses that were exempt from the EPF because they had their own retirement schemes set up before the EPF was established in 1954. There are currently 17 such companies with around 100,000 employees and a total corpus of ₹1000 crore. If these companies choose to move their retirement funds to the EPF, they will benefit from the EPF’s stable and better returns.
The government is also working on plans to raise the income threshold for mandatory EPF contributions. Currently, employees earning more than ₹15,000 per month are not required to contribute to the EPF. By raising this limit, more workers will be included in the EPF system and will benefit from additional retirement savings.
Similarly, the threshold for Employees’ State Insurance (ESI), which is currently ₹21,000, will also be increased. This means more employees will have the option to choose how much of their income they want to allocate for retirement benefits and pension.
The new rules and changes are designed to provide more financial support and flexibility to employees. With the increased withdrawal limit, workers can more easily access their savings during emergencies or significant life events. The updates also help more employees save for their retirement by raising the income threshold for EPF contributions.
For companies switching to the EPF system, it means better returns on retirement savings for their employees. Overall, these changes aim to make the EPF system more responsive to the needs of today’s workforce and provide better financial security for employees throughout their careers.
The updated rules reflect the government’s efforts to improve the financial well-being of employees and adapt to changing economic conditions.
