Govt restricts EPF withdrawal amount to employees share only till retirement

POSTED BY manish ON February 24, 2016 COMMENTS (124)

Indian Govt has brought a new amendment in the EPF rules, according to which the members will not be able to fully withdraw from their EPF before they reach the retirement age.

The maximum one will be able to take out is their own contribution and its interest (which was raised to 8.8% recently), and that can be done only after 2 months of cease employment.

Only exception shall be made for female members resigning for the purpose of marriage or pregnancy or child birth. I came across this news from Nitin Jain, when we got a mail from his employer about this notification. Thanks for Nitin to send the notification PDF to me.

EPFO restriction news

Below is the snapshot of the exact wordings taken from the notification which was released by the govt recently. please find out the PDF of the notification here

EPF notification limit on withdrawal

So whatever your employer is contributing in EPF and the interest on that part will be retained in EPF till the retirement age and you will be able to use it only at the end.

Many investors when they change jobs withdraw from their EPF’s and till now they used to get the full amount. But this is not going to happen from now onwards. What this means is that if you have an EPF account, your relationship with EPFO is lifelong now, because your account will be active till you retire (or die)

This is not a sudden decision taken. It was properly planned many months back itself and there were news about this restrictions coming up in future, however that time, it was said to be the limit of around 75% of the total amount, but now it’s close to 50% only (employees share only).

Also note that as per the stats from EPFO; out of the 13 million annual claims pending with the EPFO, over 6.5 million claims are for 100% withdrawal, that’s 50%. Which means that out of every 2 claims which EPFO gets for withdrawal, 1 of them is for full withdrawal.

EPF-withdrawal applications share

Which means that a big portion of claim withdrawal applications were coming from people wanting to withdraw the full amount. Now with this new rule, the number of applications to EPFO will also reduce drastically.

Is this new change in EPF withdrawal rules Good or bad?

From an employee point of view, the flexibility to withdraw the full amount (the painful process) has gone and now you can’t just take out full money like you used to do earlier. EPF is a social security measure, and was designed keeping that in mind, but people used to apply for withdrawal the moment they changed the jobs most of the times, now with this new change, it will not be possible and in reality one will be forced to keep a part of their wealth in EPF till their retirement

No matter how much I try think like an employee, my experience of working with thousands of investors tells me that it’s a good move. EPF is the only saving at the moment, which happens by default for a salaried person, and even though one does not touch it for years, eventually a big percentage of population always thinks of withdrawing the money on job change and the money gets utilized somewhere.

Retirement Age increased from 55 to 58

Another change in the notification is that the retirement age is increased from 55 yrs to 58 yrs, which means that one can now only consider themselves to be retirement from EPF point of view once they turn 58 yrs. One can also apply for pension only at that point of time.

This is a good move if you think long term. Consider a person who is 28 yrs old, and his salary is Rs 30,000 per month. Assume that his basic salary is 40% of the gross amount, which here comes to 12,000 per month. Now on this he will get 12% of salary deducted as for the EPF and another 12% will be added from employer which would total Rs 2,880 per month.

Now if the salary increment happens @7% per year and the return on EPF continues to be 8% per year, the person will retire with 80-90 lacs of EPF corpus at the time of retirement, provided he does not withdraw anything in between. However now even if the person chooses to withdraw the money in between, with this new rule the employer contribution is going to the restricted and one will bound to have 40-50 lacs at time to retirement (with the assumptions above). Below is the chart which shows how the numbers move.

EPF corpus new

Note that the above chart is only for illustration purpose, The only point I want to make it a decent amount of money will be there at the time of retirement because of this new forced rule.

Please share what you think of this new rule. Do you think it’s good or not? How do you react to this?

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124 replies on this article “Govt restricts EPF withdrawal amount to employees share only till retirement”

  1. Kiran says:

    This restriction is postponed until 1st July 2016 and there will be in depth look on this restriction.

    1. Thanks for sharing that !

      1. Kiran says:

        The comments are displayed in ascending order, it should be in descending order so last posted comment will come first

        1. I have made that change . Now recent comments come first

    2. Rahul says:

      Are you sure about that sir ?

  2. Abhishek says:

    This restriction on PF withdrawal has been revoked on 19th April 2016. Now anyone can withdraw complete PF balance.

    1. Hi Abhishek

      Yes, I just saw that news yesterday . Will write an article on that in few days to inform everyone !

      1. Ravi says:

        Hi,
        I worked for an organisation for 2.5 yrs and left that in June 2015. Now i want to withdrawal my full PF amount. Do i need to fill any other form except 10C and form 19?

        1. No , that should be enough !

  3. Praveen says:

    Dear Manish,

    If I have to withdraw money for buying a property, will I be entitled for withdrawal of both Employee and Employer contributions?
    Please clarify.

    Praveen

    1. From what I understand, you will not be !

  4. Venkat says:

    Dear friends,

    Please sign the following petition against this unfair restriction on the PF withdrawals.

    https://www.change.org/p/why-should-we-wait-till-58-years-to-withdraw-employee-provident-fund-noepfwithdrawallimits

  5. Deep says:

    What happens if i am laid off?I should be able to dip in my pf till i get a new job

    1. Yes, you can withdraw your own contribution after 2 months of unemployment !

  6. Naren says:

    Hi Manish
    The exemption for female members seems to be interpreted incorrectly in your article and by Nitish Jain’s employer.

    From reading the govt. notification, it is clear that female members are exempt only from the “2 month waiting period” not from the withdrawal restriction. It looks like the withdrawal restriction applies to both males and females.

    Pasted the relevant section from the govt. notification below:
    “Provided that the requirement of two months’ period referred to in sub-paragraph (2) shall not apply in cases of
    female members resigning from the services of the establishment for the purpose of getting married or on account of pregnancy or child birth.”.”

    1. Naren says:

      Article from Livemint confirming that the withdrawal restriction applies to everyone both male and female

      http://www.livemint.com/Money/Gpv3sPve39HTei7HsNmgKJ/DYK-You-cant-withdraw-employers-contributions-to-EPF-befo.html

    2. Thanks for your comment Naren

  7. Virendra says:

    Hi Manish,

    I have made PF withdrawl request from my previous employment and would not joining new employer atlease for next 4 month.

    My queastion is, as per new notification, if I can withdraw only my contribution ( not of the employer), Can I transfer the remaining amount (employer contribution) and EPS ( not requested EPS withdrawl request yet) money to new PF account whenever I join new employer.

    Regards,
    Virendra Sancheti

    1. You can only take your own contribution and nothing else till retirement

      1. Virendra says:

        Thanks Manish. But can I transfer (not withdraw) remaining amount i.e EPS and employer contribution against EPF to my new PF account

        1. Yes, you can always transfer the amount !

  8. suresh says:

    You are justifying yourself .Fools only justify themselves for any mistake.First learn how to behave with others. Character is important for any person’s life.

  9. sashi says:

    hi manish,

    dis is sashi frm andhra. today i made intraday sell order first for digjam at 8.92 , total 13500 shares.. as the price is not moving further up or down, i tought it would b squared off by3.15 pm. But my fundsindia advisors telling me, as i made sell order first and then didnt make buy order Sebi wil take penalty of nearly 25000 rupees… can i overcome tht?? please reply soon

    1. I have no idea on that

  10. Srini says:

    Manish,

    agree that PF corpus to be maintained till retirement than supporting full withdrawl. with 2016 budget where the new guideline is to tax the interest acrued out of PF corpus, this is ridiculous that the hard earned savings are being aimed for tax .. PF is no longer a ideal tax free option ..

    1. Thanks for your comment Srini

  11. RDG says:

    Sir Myself (D.O.J 21.02.1983)with salary deduction with FPF Contribution left working on 14th Nov 1995 more than 10 yrs and now aged 55 yrs and not worked later. Am I going to be eligible for Family Pension under Family pension SCEHEME 1995.my employee code 071402082 PF NO 032 and pension a/c WB/15008/186.Hope my resignation on 14th NOV will not affect my pension and if I can start my pension on reduced rate being 55 yrs now.
    Also my husband with Employee code no is 2938 and FPF ac no is W.B/15008/P-118. who worked for more than 20yrs and was deducting FPF took early retirement on 31st Dec 1994 is eligible for Family Pension under the scheme?How can we get his FPF transferred from Jaipur to Kolkata as per his FPF. No RJ/2482/1898. Whose responsibility is to transfer the funds to one place to start the Pension.Is it on us or Employer or PF OFFICE.Can I get advise on Mail as I am not very Computer savvy and may not be able to locate this site again am afraid.Pl help and tell me whom to approach as we are not getting any pension.

    1. Hi RDG

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well

      Manish

  12. Durgesh says:

    What is the option for the employees who is permanently leaving the country?

  13. tiwari says:

    I was working for a Central Govt Educational Institution through Outsourcing Employer and EPF Contribution was remitted below the Wages Percentage and huge amount of difference was later deposited by the Outsourcing Employer after raising Several Complaints with Ministry of Labour and Employment.
    The Best Suggestion would be make EPF as optional and those who require to contribute can contribute the same as huge amount forgery is being done by both the Primary Employer and the Outsourcing Employer.

    1. Thanks for your comment tiwari

  14. Abid says:

    hello,

    in last month i filed claim for withdrew my EPF money , and my application is under process , can it affect by this new decision ?

  15. Prashant says:

    New withdrawal policy is a difficult pill to chew for many but this is absolutely in favor of both – Govt. and employee in long term prospective. I appreciate this move and we are in pretty much in line with western nation’s policy of the social security. In US or developed countries, one can withdraw the social security savings but hefty fines and tax implications.

    ** This is my view.

    1. Thanks for your comment Prashant

  16. Raja says:

    In my opinion it is good move. Peoples will realize when they reach retire.
    Peoples start thinking of withdrawal and spend lavishly.

    EPFO is going on-line, probably in future, there won’t be much problem in managing it.

    1. Thanks for your comment Raja

  17. Karna says:

    Hi,

    Now if decide not to work after let say 45years, will i get interest for full amount till age 58??

    1. Raja says:

      I think so. If there is no interest , then no use.

    2. SHAN says:

      Hello Manish, I had the same question. What if some one decides to quit his job by 45 years or for the sake of argument say any time before the stipulated 58 years. When there is no more contribution flowing into such an EPFO account with the holder being unemployed. What happens in this scenario? Would the interest still be getting credited on the Principal + Interest amount accrued so far year on year till 58?

      1. Kiran says:

        Manish please clarify this? Most people has this doubt including me

      2. YOu will only get interest on the employers contribution part, because thats locked. For the employee share you have choice to take out if you want. So no interest on that after 3 yrs

      3. INterest will still be there for the employer contribution !

    3. Only on employer contribtuion !

  18. sanketshah11 says:

    Dear Manish,
    Thanks for this post.

    Just a quick question – “Employee share” would include any amount contributed as voluntary provident fund, right ?

    1. sanketshah11 says:

      Sorry, just saw the comments, you have already answered.. Thanks.

  19. RevansiddappaPH says:

    Its good move. It helps at the retirement time as it is intended for. I hope restriction on only withdrawal amount and age limit, keeping all other conditions same. It is good if Pension age limit they would have maintained same.

    1. Thanks for your comment RevansiddappaPH

  20. MiraD says:

    I have recently quit at 52.
    Under older rules I would have received interest for 3 years in my dormant account.
    Now the interest will accrue until withdrawal even if my account is dormant ?
    At age 58, I can completely withdraw both employer and employee contributions , right?

    Thank you for this v timely post.

    1. From what I understand the interest wil be there on employer contribution only

      1. MiraD says:

        Thank you.
        Some interest being better than none at all!

  21. Nagamohan says:

    Dear Manish,
    A good article as always.In my view its a good move by the EPFO for the retirement benefits of employees because people keep on changing the employer once in 3-4 years and close their accounts then and their which doesn’t give any compounding effect.However the rule can be withdrawn for the following cases.

    a. For people requiring money for their medical emergencies
    b. People moving abroad and will not take any employment in India thereafter(But it needs proper scrutiny else every body will use the same option)
    c. Also the retirement age can be reduced since many doesn’t like to work up to 58 years

    In addition EPFO organisation should ensure proper payment of EPF subscription by employers(In recent days many organisation deduct money from employees but doesn’t pay properly) and EPFO should also transfer process in a timely manner not like in the past for transferring it takes 2 years in the past.

    In general its a good move subject to transparency and effective functioning of EPFO offices in the future

    1. Thanks for sharing that Nagamohan

  22. leonard says:

    for buying flat allow withdrawals or not.
    please confirm. recently I have booked flat, I am fully depend on the pf loan.
    planning for apply for loan in march. my age is 57. not able to go for bank loan.

    1. Its allowed but for employee contibution only !

  23. vsprakash says:

    This move is going to make many genuine people borrow unnecessarily and be debtors for a long time.

    1. Thanks for your comment vsprakash

      1. Bhupesh says:

        Is full of withdrawl rule may change if not date of effective of above said rule

        1. I am not clear about your question !

  24. Shankar says:

    From My point of View, its very bad move by the Government.
    Why the Govt making such a move which forcing all employees to hold the money till 58
    What if I am planning to get VRS or terminated by the company and planning to start a new business with this money.
    If Govt want to provide benefits to employee, ask them to increase the interest rate rather than this rule
    What if govt reduces the interest below 5% in future?? At the same time, balanced debt fund giving you 8%. In this case, are u able to switch this money. No
    Govt want to take our money and invest in stock market (now its 5% who knows it will increase further) and help corporates indirectly

    1. Thanks for your comment Shankar

  25. Nitin says:

    If someone is moving abroad permanently….even they can’t withdraw full?
    Thats really stupid isn’t it?

  26. Alok says:

    What happens to people who have left India and are working elsewhere? Or, have become a resident of another country?

    1. There is no clarification on that

  27. Abhinav says:

    Frankly the kind of inefficient, slothful, corrupt organisation EPF Department is, I dont trust them to take care of my money. Who knows what scam these guys might be cooking and might loot our hard earned money.

    I am forced to contribute to EPF due to the prevailing employment law, so in that sense this is bad news as I have to take the risk of waiting till the age of 58 years to see my money.

    1. Kiran says:

      you are true, EPF cannot be trusted

    2. Thanks for your comment Abhinav

  28. himanshu says:

    I am 35 and can manage to fight with pf for withdrawel which is very tiresome and tiring, if he epfo is in different state like mine it is double trouble. Unless epfo joins 21st century and make withdrawel online and hassle free it will be immensely difficult at the old age of 58.
    And what about pf maintained by trust.

    1. WHy not try RTI ?

      We have many people here who did get their EPFO issues solved by filing RTI !

  29. Amol says:

    Manish, does this restriction apply on VPF as well? As that’s also treated same as EPF in most of the cases.

    1. Mohit says:

      I think the rule says 50% withdrawal allowed, so irrespective of VPF, Employee share or Employer share; only half of total corpus including interest accumulated, can be withdrawn

      1. deepak says:

        i hvnt seen 50% clause. on the gov site it is mentioned that person can withdraw his contribution so i guess VPF + his contribution + interest , one can withdraw.
        dont know much but this should happen 🙂

        1. Kiran says:

          what about the pension fund which is 8.33%?

        2. Yea , its not 50% as such, but for most of the people, it turns out to be approx 50% , hence 50% is mentioned. Its easy to understand !

    2. No , VPF is the employee own contribution !

  30. Amit says:

    I believe this restriction is only in the case of cessation of employment. All other cases such as withdrawal for construction of house/ marriage remains same. Manish can you confirm this.

  31. Satti says:

    Is the Notification dated 10th February Genuine. How can the government give a notification where eve the spelling of LABOUR is spelled incorrectly.

    Not sure of the logic also. If a person stops working and withdraws only the employee share then what happens to the rest of the money and the account – will the account get locked with no further interest after 3 years.

  32. shivkumar says:

    this good intiative for middle incoem class , who can survive with rest of balance outstanding in his account to lead a fair life.

    1. Thanks for your comment shivkumar

  33. VenkataMahesh says:

    Its really a good move for employee in long term. I am sure one will understand this at the time of retirement only.

    Now most of the employees bit disappointed with this new rule. But most of them didn’t allocate their financial amount into debt instruments and this new rule will satisfy that.

    Nice and happy times for employees.

    1. Thanks for your comment VenkataMahesh

  34. Ruchi says:

    Hi Manish, I have PF amount from my 2 earlier employer and I have not withdraw it. These 2 are for year 2009 and 2011. Could you please advise what will happen to my pf amount. I have checked the status and they are idle.

    Ruchi

    1. Satish says:

      Amma..why don’t you transfer both in your active account?

    2. Dominic says:

      If you transfer it to your active account it will interest at least. Idle accounts will not be paid interest after 3 years.

      1. Ruchi says:

        Hi Satish, Thank you for reply but I don’t have any active PF account in India.

        Hi Dominic,

        As I mentioned to Satish that I don’t have any active PF account in India. Could you please advise if withdrawal restrictions implied on old accounts too. If not then what is the best way to withdraw the amount.?

        Thanks in advance.

        Ruchi

    3. Hi Ruchi

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well

      Manish

  35. Ramadevi says:

    Will the amount lying in the Fund able to earn interest even after contributions are stopped in case of a person quitting job many years before retirement age?

    1. Madhab says:

      Yes, it will continue to yield interest. So even if you stop working after some time the account will continue to remain active. Govt will credit interest.

    2. It will earn only for the employer contribution !

  36. Baron says:

    What about international work transfers? As per the current rules, an account is termed dormant once there are no deposits for 3 consecutive years. Any interest is also not paid on the corpus in such accounts. With the new rules such accounts will not be able to withdraw their complete corpus nor get any interest on the remaining corpus.

    1. Rajesh S says:

      Good Point @Baron, I am also looking out answer for your question.

    2. the employer contribution will earn interest

  37. Joel says:

    This is a good move . I hope the government does not harass my nominees once I am not there , just incase i leave this earthly aboard before 58 . Btw 95% of ppl i know have senselessly withdrawn EPF while changing jobs . On a differnt note since our country does not have any concept of social security I guess this corpus would be very beneficial . One point keeps me wondering what is going to happen to us generation X , Y and Z once we grow old . No pension no nothing . I am not sure whether all the youngsters who are so busy with FB , Wats app and work and party and chilling that a thing (retirement) that seems far may one day be right at your door . I guess that is when EPF may come to rescue .

    1. Anjan says:

      Excude me, what do you mean by “senselessly withdrawn EPF”? It is our hard earned money, aren’t we allowed to do whatever we please with our own money? Why does the government think it has the right to tell us how we should handle our finances?

      How I plan for my retirement is my personal business. If I don’t take care of my future needs, I will suffer the consequences. I don’t need the government to force me into some scheme to save for retirement. EPS is a horrible scheme as it is which does not earn any interest and pays you a pittance once you retire which won’t even be enough to pay your electricity bill at that time.

      Very disappointed by this move from the government. It seems there has been nothing but bad news since the Modi govt. took over. It favors the corporates too much and giving the shaft to the common man.

      1. Srinivas says:

        To put the comment in context, one needs to understand retirement corpus creation process. As we deposit regular small amounts in the corpus(by forced deduction at the time of salary), the corpus grows gradually. The corpus grows at a normal rate, in the beginning. After 10-12 years, the amount in the account will be big enough for the power of compounding to make a significant impact. If one withdraws corpus at this point (or before, when it becomes sufficiently large), he is back to square one, as far as retirement corpus creation is concerned. Though, this withdrawn corpus may help tide over the immediate need, hampers retirement fund creation. That is the main reason why, there are many restrictions on withdrawing from retirement corpus. It is for the benefit of the person.

        Even though the person’s contribution is withdrawn, the company contribution remains and keeps earning interest for the remaining period. This appeared to be a good move.

        1. Anjan says:

          You completely missed the point I was trying to make. It’s all about having the freedom and choice to do whatever you want with your own money. I understand the govt wants what’s best for us (pun intended) but why force people to keep their money somewhere they do not want?

      2. Joel says:

        I like businessman Anjan . He has so many businesses 🙂 Jokes apart , I cannot disagree with a single comment he has made and it was also nice that the whole thing was put into perspective by Srinivas . Thanks Srinivas for jumping to my rescue . By the way there may be a time when an individual might be cornered to invest where the Govt says to invest . Govt if it wants to suck you dry need not increase taxation but collect it indirectly . I can see the signs consider the following EPF has been locked for life long , PPF rate of interest is being reduced , 80 C is highly insufficient and too crowded , NPS is a joke , FD rates are much below inflation , Stock market is highly volatile , Gold and Real estate keep your fingers crossed . Where do I invest ?? I have an idea .. on myself .I am going to buy a Iphone 6S and ultra HD 4K TV . No money left , nothing to invest . Problem solved . Somebody questions me I say none of your business 🙂

        1. Nag says:

          Joel,

          Consider my example, in 2013 I have withdrawn 100% of my PF, added it to my savings then bought a property which yielded me 100% return in 3 years. If govt is restricting it even your account is aged (>10 years) then your money got stuck at lower return which is hampering your financial life. So the interest they are paying will not beat the inflation rate. It would be good if they are not changing the previous rules..Ex. Marriage, buying property, constructing house…If I have to take home loan banks are charging 10-12% (vary based on the market conditions), at the same time if Govt is allowing you to withdraw the money (100%) and construct the house you will be saved on interests..Correct me if I’m wrong.

          1. Joel says:

            Dear Nag,

            My friend you are absolutely correct and I should appreciate you for utilizing your EPF amount wisely according to me . Unlike the majority of cases I have seen . They have bought iphones , TV , sedans and even gone on holidays with this amount . Anyways its there business and not mine . Now if anybody is unhappy with this he should get in touch with Mr. MANISH GUPTA, Jt. Secy. MINISTRY OF LABUOR AND EMPLOYMENT .

      3. NDK says:

        They are generating funds which they can use lavishly (Hard earned money of salaried professionals). Modi brings in new new schemes only to generate funds whether it is Bank account opening for villagers, waival of subsidy on gas cylinders, swach tax. Bloody nonsense. I had lot of hopes from this government. Totally disappointed the way it is functioning.

    2. Suresh says:

      Mr Joel..This is open platform to discuss about EPF.Your comment “Senselessly” is not acceptable.Everyone has their one reasons to withdraw EPF.You don’t need to certify them.I hope Manish will not entertain comments posted by people like you.

      1. Joel says:

        Read my comments and then you would understand what I mean by senselessly . I don’t judge people its their business . Its amply clear from my above posts . Also as you have said this is a open forum and we can discuss opinions and make our comments and express our views . All in the spirit of healthy discussion .Right or wrong is a different matter . You say I am wrong , I say you are wrong . Who then decides ? I have atleast expressed my views . You have one single post in this whole section and all you do is to try to get me blocked . You have not expressed your views on the topic , neither have you contributed with your thoughts . Infact no there is no clarification or question also asked . Your quality of contribution is Zero.

    3. Thanks for your comment Joel

  38. Parul says:

    What if I am leaving for higher studies abroad and am a woman 😀 ?

    1. Still I dont think you will get it !

  39. umesh says:

    will share market will go up because of this??

  40. sunita says:

    nice post

  41. Vicky says:

    It’s a good move from Govt. of India.

  42. Mayank says:

    If I resign and decide not to do any job further at the age of 35 and look for some setup or business, in that case there won’t be any monthly contribution to the EPF account and per this amendment employer part will be retained with EPFO till retirement age of 60. In that case will I be getting interest in the EPF account considering in mind that there won’t be any monthly contribution in future.

    1. Shabari says:

      In your case, add to it that, if there is no contribution after 3 years your account will become dormant !. What is supposed to happen in this situation… Just a thought 😉

    2. Renga says:

      Yes your balance will continue earn interest until you withdraw. And this is a very good move by GOI. My sister who is govt teacher keep taking money from PF kitty without realizing the impact of her pension amount.

      1. Anjan says:

        Your sister has every right to take out her own hard earned money and do whatever she pleases with it. Stop forcing people to do things against their will.

        We reap what we sow and its upto each one of us to safeguard our future, don’t let the government stick its nose into our personal business. What if I want to invest the PF money is some other instrument which yields better return?

        1. Praveen says:

          People who want to withdraw should be alternatively be forced to pay the tax benefit they got for all these years.

          Govt is giving tax benefit and a good interest rate to help people generate a retirement corpus.

          If people are shouting at it and does not want to leave money they should be forced to pay back the tax on interest with retrospective effect.

          Just my thoughts.

          1. Anjan says:

            What tax benefit? The money that goes into EPF forms a part of 80C deduction of max 1.5 lac. It does not come under some special exemption quota. If I had the option of not investing in EPF, I would have invested that amount in PPF or ELSS and still claimed the full 1.5 lac deduction allowed. So what special favor is the government doing to me by forcing me to invest in EPF?

            1. praveen says:

              EPF falls under EEE category. One can invest a maximum of 1.5 lakhs in PPF. But no such limit (as of today in EPF).

              EPF does not suffer from risks associated with ELSS.

            2. Chandan says:

              You are just thinking about someone educated and probably smart as you . More than 85% working class people I know don’t have the same understanding as you . The moment they stumble into the next small issue and see a corpus in EPF , they withdraw it not understanding the power of compounding . The only investment they will be left with whil returning is a flat that they can’t sell and some useless LIC policies . Given this situation , I think it’s a great idea by the government and is thinking about the larger population rather the smaller financially educated population . None and I repeat none of my friends or family make the required SIP or PPF contribution every year and there is always an excuse . Retirement is so far away that it’s not even a speck on the radar .
              I think it’s a great move the govt . I know you will disagree . Done a matter . My opinion 🙂

            3. Anjan says:

              So you think it’s great that the government is limiting your options instead of leaving it upto each one of us to make our own financial decisions? Next thing you know, the government decides to take away your voting rights because most people are too dumb to vote for the right candidate anyway. The masses’ opinion can be swayed too easily as people are emotional in general and this hampers their judgement. Why even have democracy then?

              Think about what you’re saying!

            4. Chandan says:

              I have thought about it and financially I maintain that its better from greater good . From restriction on a retirement scheme withdrawal to restriction on voting rights is a stretch and I am not going to indulge in paranoia .
              Would I prefer that I have the ability to withdraw as needed, yes . But is this better for the great good – Yes
              What I am glad about is that EPF details are now online and I can easily track my PF status and amount unlike 2 years ago where it was a complete black box

            5. Chandani says:

              hello Chandan,

              Nothing is a stretch . I guess you missed on this piece of news .

              “Shiv Sena leader Sanjay Raut in an editorial demanded scrapping of voting rights of Muslims” Source :

              http://www.dnaindia.com/india/report-strip-muslims-of-their-voting-rights-shiv-sena-2076936

              Yours
              Chandani

    3. Still you wont be able to take it out

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