The Employees’ Provident Fund Organisation (EPFO) has announced big changes in its withdrawal rules. The Central Board of Trustees (CBT) of EPFO approved these proposals on October 13. With this change, it will now be easier for lakhs of private sector employees to withdraw money from their EPF accounts. Subscribers are happy with this decision, but experts have raised concerns about some new rules.
Only Three Conditions for Withdrawal Now
Earlier, there were 13 conditions for withdrawing money from EPF accounts. Now, only three conditions will apply — essential needs, housing needs, and special circumstances.
Essential needs include medical, marriage, and education. Under housing needs, subscribers can withdraw money for building or buying a house. In special circumstances, subscribers can withdraw money without giving any reason.
10 Times Withdrawal Allowed for Education
Under the new rules, subscribers can now withdraw money from their EPF accounts 10 times for education purposes and 5 times for marriage needs. For medical and special circumstances, withdrawals are allowed three times and twice in a financial year, respectively. Experts believe these new rules are made in the interest of subscribers and will benefit lakhs of people.
Concerns Over 100% Withdrawal Rule
EPFO’s Central Board of Trustees (CBT) has also made a major decision, allowing subscribers to withdraw up to 100% of their funds. However, they must keep 25% of the funds in their EPF account, meaning only 75% can be withdrawn. Experts say this change may not be right, as it goes against the main purpose of EPF.
EPF Funds Are for Life After Retirement
Experts point out that EPF is meant to support employees after retirement, when regular income stops. It helps cover post-retirement expenses and ensures financial security in old age. Allowing large withdrawals may create problems later, as employees might not have enough savings for their retirement years.