Hello, can anybody provide me with a calculator or basis for creating a calculator to understand how much an employee can get in their EPF if they resign from a company and choose to withdraw that amount?
For example, if a person contributes 12% to their EPF account, and the company matches this contribution, but the company's contribution is more towards EPS with a smaller portion going to EPF. Consequently, when an employee decides to leave the company and withdraw the amount they believe they have contributed, they find that the amount is significantly less than their total contribution.
I am seeking answers to the following questions:
a) Can the pension amount be fully withdrawn before the age of 58 or 55 (55 being the age at which EPS contributions stop)?
b) If (a) is true, what is the minimum age or years of service required, and does it need to be with the same company or continuous employment?
c) If the pension amount cannot be withdrawn and a person opts out of EPF, what happens to the deducted pension amount? Is there a way to claim it, or is it forfeited?
d) I am also aware that all EPF withdrawals are taxable as salary; therefore, if (a) is true, is EPS withdrawal also taxable?
These questions have become increasingly relevant in today's age of COVID and pay cuts.
Please share your valuable insights into these questions or kindly direct me to related posts on Citehr where similar queries have been addressed.
From India, Mumbai
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8For example, if a person contributes 12% to their EPF account, and the company matches this contribution, but the company's contribution is more towards EPS with a smaller portion going to EPF. Consequently, when an employee decides to leave the company and withdraw the amount they believe they have contributed, they find that the amount is significantly less than their total contribution.
I am seeking answers to the following questions:
a) Can the pension amount be fully withdrawn before the age of 58 or 55 (55 being the age at which EPS contributions stop)?
b) If (a) is true, what is the minimum age or years of service required, and does it need to be with the same company or continuous employment?
c) If the pension amount cannot be withdrawn and a person opts out of EPF, what happens to the deducted pension amount? Is there a way to claim it, or is it forfeited?
d) I am also aware that all EPF withdrawals are taxable as salary; therefore, if (a) is true, is EPS withdrawal also taxable?
These questions have become increasingly relevant in today's age of COVID and pay cuts.
Please share your valuable insights into these questions or kindly direct me to related posts on Citehr where similar queries have been addressed.
From India, Mumbai
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In response to your inquiries:
a) The pension amount can be fully withdrawn before the age of 58 or 55, subject to certain conditions. The Employee Pension Scheme (EPS) allows for early withdrawal under specific circumstances, such as permanent disability or migration abroad.
b) To withdraw the pension amount early, the minimum age requirement is 50 years, and the individual must have completed at least ten years of service. Continuous employment is not mandatory; the years of service can be cumulative across different employers.
c) If a person opts out of EPF and the pension amount cannot be withdrawn immediately, it remains preserved with the Employees' Provident Fund Organization (EPFO). Upon reaching the eligible age for withdrawal, the individual can claim the pension amount along with interest.
d) Similar to EPF withdrawals, EPS withdrawals are also taxable as per the prevailing income tax laws. The tax treatment is based on the individual's total income and the applicable tax slab.
For further details and specific scenarios, it is advisable to consult the EPFO guidelines or seek assistance from a financial advisor specializing in retirement benefits.
From India, Gurugram
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a) The pension amount can be fully withdrawn before the age of 58 or 55, subject to certain conditions. The Employee Pension Scheme (EPS) allows for early withdrawal under specific circumstances, such as permanent disability or migration abroad.
b) To withdraw the pension amount early, the minimum age requirement is 50 years, and the individual must have completed at least ten years of service. Continuous employment is not mandatory; the years of service can be cumulative across different employers.
c) If a person opts out of EPF and the pension amount cannot be withdrawn immediately, it remains preserved with the Employees' Provident Fund Organization (EPFO). Upon reaching the eligible age for withdrawal, the individual can claim the pension amount along with interest.
d) Similar to EPF withdrawals, EPS withdrawals are also taxable as per the prevailing income tax laws. The tax treatment is based on the individual's total income and the applicable tax slab.
For further details and specific scenarios, it is advisable to consult the EPFO guidelines or seek assistance from a financial advisor specializing in retirement benefits.
From India, Gurugram
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TAXABILITY ON EPF WITHDRAWAL.docx
Article on EPF withdrawal in The Indian Express-28.05.2 013.pdf