EPS and PF Withdrawal Process.

Amid the ongoing lockdown, people are withdrawing money from their PF account. But most of the employees are not aware of their EPS (Employee Pension Scheme) account. That is why today we are giving you information to withdraw money from it.

What Is EPS ?

People who do jobs are often worried about their PF account. But often, most of the people working in a private company do not know about their pension account. While paying for it every month. 

Let me tell you that the amount deducted from the salary of a jobber goes to two accounts. The first is provident fund ie EPF and second is pension fund ie EPS. 12 percent of the employee's salary deducted from the employee's salary is deposited in the EPF. Apart from this, 3.67 percent is deposited by the company in EPF and the remaining 8.33 percent is deposited in the Employees Pension Scheme (EPS). However, there is a maximum limit of Rs 1,250 per month.

8.33 percent contribution of the company in EPS has been made according to monthly salary of Rs 15,000. 

For example, if the monthly salary of a person is Rs 25,000, then the contribution of the company will be limited to 8.33 percent of Rs 15,000. Similarly, if someone gets a salary of Rs 10,000, then the contribution of the company in EPS will be 8.33% of Rs 10,000.

Now the question arises, when and how can the money be withdrawn from this account?

According to EPS rules, a member who has served less than 10 years or has turned 58 years (whichever is sooner) after leaving the job is entitled to withdraw a lump sum from the EPS account.

If the age of such a person is less than 58 years, then instead of withdrawing a lump sum, he can opt for a scheme certificate under EPS. Such a scheme certificate can be obtained when the person has planned a job in another institution.

If the years of service have crossed 10 years then the scheme certificate is issued to the person. The EPFO counts the year since the day you joined the EPF scheme. However, the years of service are not necessarily consecutive.

Suppose you started a job in 2010 and joined the EPF scheme. After working here for three years, you have started a job in another company. But this company does not offer you EPF benefits because it does not come under the ambit of EPF.

You work for 4 years in this 'B' company. In the year 2017, you start a job in a third company. Where you get the benefit of EPF scheme. At present, by 2020, the EPS amount will be calculated based on the year worked in A and C, which become six years. In this case, you can make a one-time withdrawal.

The earlier the 10 years of service, the less the amount of service, you will be able to withdraw less amount. The lump sum withdrawal from the EPS scheme is allowed only if the years of service are less than 10 years. The amount to be refunded to you will be based on Table D given in the EPS Scheme 1995.

Can I withdraw pension money if the job is more than 9 years and 6 months?

If your job has been more than 9 years and 6 months, then you will not be able to withdraw the pension amount with your PF. Because, 9 years 6 months of service is considered equal to 10 years.

What Is EPFO Rule ?

The rules of EPF ​​ state that if your job becomes 10 years, then you become entitled to pension. After this, you will start getting the benefit of monthly pension at the age of 58 years. This means that you will get a lifetime pension, but you will not be able to withdraw part of the pension before retirement.

What Is Pension Certificate ?

It is very important that on completion of pension certificate-10 years, one gets pension certificate. This certificate contains information about pensionable service, salary and pension amount due on leaving the job. If a person has a scheme certificate of service of 10 years or more, then he becomes entitled to a monthly pension under the age of 58 under EPS. However, he also has the right to apply for pension before the age of 50 years.

Will withdrawing money from an EPS account be taxed?

Lump sum withdrawal from an EPS account comes under tax. However, in the income tax law, the situation is not clear about which item this tax will come in. Under the EPF scheme, the member has the option of withdrawing the entire amount and closing the account upon leaving the job.

So will pension be given on retirement too?

If you withdraw part of the pension in case of less than 9 years and 6 months, then remember that you will not be entitled to pension after this.
Withdrawal of pension with PF means Full & Final PF settlement and in such cases your PF account number is completely closed. Due to this you cannot avail pension facility for your retirement. .

What happens to the pension amount if I transfer my PF?

If you transfer your provident fund (PF) from one account to another, then whatever your service history, you will never be able to withdraw the pension amount under any circumstances.

 It is clear that even if you work at different places, your service history becomes 10 years, then you will be entitled to pension and at the age of 58 years you will get some salary as monthly pension. .