After last year's fiasco over taxing of provident fund, the government seems to be working overtime to make changes to the retirement scheme. The government has introduced a slew of measures to make the Employee provident Fund Organsiation or EPFO more subscriber-friendly, while it is reportedly proposing more steps.
Here are the steps the government has taken or has proposed to take and what they mean to you:
1) The EPFO recently simplified the norms for provident fund claims by coming out with a single one-page form for all types of claims. This means you won't need to fill forms like Form 19, Form 10C, and Form 31 anymore to make the claims. These forms were being accepted for PF Final Settlement, EPS Pension withdrawal and PF Partial withdrawal respectively in the past.
The new form called the new Composite Claim Form (CFF) are of two types called CCF (Aadhaar) and CCF (non aadhaar). Even the process has now been made simple where the form can be submitted to EPFO which bypasses the employer completely if you are Aadhaar complaint and the account is seeded with your bank details. Here you will need to fill the CCF (AAdhaar) form and for those who are not Aadhaar compliant, they will have to fill the CCF (non aadhaar), and include the employer in the process.
Even taking advances from your PF corpus has been made easy, as going forward you don't need to provide any kind of document as proof. The recent order by the government says, "submission aadhar compliant and non-Aadhar compliant form duly signed by the EPF subscriber shall be construed as 'self-certification for the above partial withdrawals for which no documents would be required to be submitted to the EPFO offices." In short, less amount of paper work for employees as well as faster resolution of claims will be set in place.
2) By May this year EPFO is planning to launch an online facility which will simplify the claim process, EPFO Central Provident Fund Commissioner VP Joy told recently. Under the proposed scheme, the claims are expected to be settled within 20 days of submitting the form. It usually take 4-5 months for the process to get done and money to credit into your bank account. The institution is working to make the entire process computerised.
3) In another move the government is considering decreasing the employers liability towards Employees Provident Fund (EPF) in the construction sector to 10 percent of the basic pay as against the current 12 percent, as reported by The Financial Express. Reducing the amount of employer’s contribution, will possibly nudge more building/construction units to extend the EPF benefits to workers. Last year, the Delhi High Court had passed an order stating that all construction workers need to be mandatorily enrolled under the EPF scheme. The Hindu Business Line had reported, "Builders had expressed concerns over "ambiguity" in the eligibility of workers, many of whom were employed on a casual or short-term basis." And enrollment of construction workers in PF was below expectations.
4) EPFO is expected to launch a special housing scheme this month, which will make life of crores of members easier if they have or plan to avail a home loan. This scheme will enable members to make down payments or pay EMIs from their EPF account to buy houses.
According to PTI, the subscribers as well as their employers would be required to form a group housing society which would further tie up with banks and builders or sellers of homes so that EPFO members can buy homes. The scheme is likely to be launched anytime after 8 March.
Explainer: The granular details are yet to be out, only time will tell if this scheme is good.
Do keep tracking this space as we bring you more information when the scheme is launched.