On February 1, 2016, the Central Government notified amendments to the Employees’ Provident Funds Scheme. These changes will take effect from May 1, 2016, and may be summarised as follows:
(a) members (i.e. employees) of the Provident Fund were earlier allowed to withdraw their full Provident Fund accumulations at the time of retirement after attaining the age of 55. Following the amendment, the age qualification has been raised to 58;
(b) members of the Provident Fund were earlier permitted to withdraw up to 90% of their Provident Fund accumulations upon attaining the age of 54 years or 1 year before their actual retirement, whichever is later. Following the amendment, this age limit has been increased to 57;
(c) an employee could, after 2 months following the cessation of his/her employment, make a full withdrawal of all Provident Fund accumulations. Following the amendment, the employee will only be allowed to withdraw an amount equal to such employee’s contribution to the Provident Fund plus applicable interest. However, this change will not be applicable in the case of female employees who resign from employment for the reason of marriage, pregnancy or childbirth;
(d) the employee referred to in paragraph (c) above could re-register with the Employees Provident Fund Organization as a “new member” upon taking a new employment. Following the amendment, such employee will not be permitted to open a new Provident Fund account, but continue his/her existing account;
(e) the provisions of the paragraphs above will also be applicable to foreign workers who belong to a country with which India does not have a Social Security Agreement. However, in the case of foreign workers who belong to a country with which India has a Social Security Agreement, the old provisions will continue; and
(f) employees who were migrating outside India or taking up employment abroad could withdraw their full Provident Fund accumulations prior to leaving India. Following the amendment, this provision has been omitted.