Introduction
The Employees’ Provident Fund (EPF) is a retirement savings scheme that provides financial security to employees in India. It is managed by the Employees’ Provident Fund Organisation (EPFO) and is one of the most popular retirement savings schemes in the country. The EPF pension commutation rules and latest updates are important for employees to understand in order to make the most of their retirement savings. This article will provide an overview of the EPF pension commutation rules and the latest updates related to them. It will also discuss the benefits of commutation and the various options available to employees. Finally, it will provide some tips on how to make the most of the EPF pension commutation rules.
EPF Pension Commutation Rules & Latest Updates
EPF Pension Commutation Rules
1. An employee can withdraw up to 40% of the accumulated pension wealth as a lump sum amount at the time of retirement.
2. The commuted amount should not exceed one-third of the total pension wealth.
3. The commuted amount should be paid in one lump sum and cannot be withdrawn in installments.
4. The commuted amount is taxable as per the applicable tax laws.
5. The commuted amount is not eligible for reinvestment in any other scheme.
Latest Updates
1. The Employees’ Provident Fund Organisation (EPFO) has recently announced that the pensioners can now avail the facility of pension commutation even after the age of 80 years.
2. The EPFO has also announced that the pensioners can now avail the facility of pension commutation even after the age of 90 years, provided they have completed at least 10 years of service.
3. The EPFO has also announced that the pensioners can now avail the facility of pension commutation even after the age of 100 years, provided they have completed at least 20 years of service.
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The employees who are contributing to employee provident fund scheme will automatically become members of employee pension scheme 1995. Under employee pension scheme 1995 when an employee completes the age of 58 years and when he or she contributes at least 10 years for EPF scheme will become eligible for monthly pension.
What is Pension Commutation Amount
While claiming monthly pension of the pensioners, they can get 1/3rd part of their monthly pension amount as a lump sum for 15 years. This amount is tax-free. After 15 years employees will get their pension as usual.
This facility was stopped in 2009, but recently it was again resumed on August 2019.
Example:
For example, if an employee monthly pension is 9000 Rs after retirement then 1/3rd of 9000 Rs i.e 3000 Rs will deduct from the employee monthly pension amount.
Now employee will get 6000 Rs as monthly pension for 15 yrs if he/she claims for pension commutation
Here the commutation amount will be calculated in the following manner:
- Monthly deduction amount = 3000 Rs
- For 1 year it is 3000 x 12 months = 36000 Rs
- For 15 years it is 36000 x 15 = 5,40,000 Rs
- So now the pensioner will get 5,40,000 Rs as commutation amount
How to Claim Pension Commutation Amount
Pensioners can claim their PF pension commutation amount by submitting PF pension application form 10D. On this form in the field, no 9 tick YES and submit this form to your regional EPF office.
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EPF Pension Commutation Rules & Latest Updates
The Employees’ Provident Fund (EPF) is a retirement savings scheme that is managed by the Employees’ Provident Fund Organisation (EPFO). It is a social security scheme that provides financial security to employees after retirement. The EPF pension commutation rules are designed to ensure that the pensioners receive their pension in a timely and secure manner.
Under the EPF pension commutation rules, a pensioner can opt to receive a lump sum amount from the EPF corpus instead of receiving a regular pension. This lump sum amount is known as the commuted value of the pension. The commuted value is calculated based on the pensioner’s age and the number of years of service. The commuted value is usually lower than the total pension amount that the pensioner would have received over the years.
The EPF pension commutation rules also provide for the payment of a lump sum amount to the pensioner’s family in case of his/her death. This amount is known as the family pension. The family pension is calculated based on the pensioner’s age and the number of years of service. The family pension is usually lower than the total pension amount that the pensioner would have received over the years.
The EPF pension commutation rules have been revised recently to provide more flexibility to pensioners. The new rules allow pensioners to opt for a higher commuted value of their pension. This means that pensioners can receive a higher lump sum amount from the EPF corpus. The new rules also allow pensioners to opt for a lower commuted value of their pension. This means that pensioners can receive a lower lump sum amount from the EPF corpus.
The EPF pension commutation rules also provide for the payment of a lump sum amount to the pensioner’s family in case of his/her death. This amount is known as the family pension. The family pension is calculated based on the pensioner’s age and the number of years of service. The family pension is usually lower than the total pension amount that the pensioner would have received over the years.
The EPF pension commutation rules have been revised recently to provide more flexibility to pensioners. The new rules allow pensioners to opt for a higher commuted value of their pension. This means that pensioners can receive a higher lump sum amount from the EPF corpus. The new rules also allow pensioners to opt for a lower commuted value of their pension. This means that pensioners can receive a lower lump sum amount from the EPF corpus.
The EPF pension commutation rules also provide for the payment of a lump sum amount to the pensioner’s family in case of his/her death. This amount is known as the family pension. The family pension is calculated based on the pensioner’s age and the number of years of service. The family pension is usually lower than the total pension amount that the pensioner would have received over the years.
The EPF pension commutation rules have been revised recently to provide more flexibility to pensioners. The new rules allow pensioners to opt for a higher commuted value of their pension. This means that pensioners can receive a higher lump sum amount from the EPF corpus. The new rules also allow pensioners to opt for a lower commuted value of their pension. This means that pensioners can receive a lower lump sum amount from the EPF corpus.
The EPF pension commutation rules and latest updates are available on the EPFO website. Pensioners can also contact their local EPFO office for more information about the rules and updates.
