By investing in equity markets, EPF should be able to earn an annual income and earn positive returns each year, so that it can be credited to members.
The Finance Ministry had decided to lower the EPF interest rate of 8.8 per cent for 2015-16 to 8.7 per cent. The decision drew flak forcing the government to uphold 8.8 per cent.
In 10 steps, we show you how to calculate the amount you need to put away for a comfortable retirement.
Krishna's goals include building an emergency corpus, saving for kids’ education and weddings, retirement, and taking a vacation.
Investing means reaching financial goals. So first focus on goals and then think about investments.
This can impact your take-home pay and the corpus accumulated at the time of retirement. Further, the cost-to-company will change too.
EPFO offices would be connected to central server in couple of months following which the facility of online submission of all sort of applications can be introduced.
The EPFO presently covers 190 industries (mentioned in the schedule 1 of the EPF Act) with over 20 crore accounts in over 11.3 lakh covered establishments. It manages a corpus of over Rs 10.5 trillion.
The move comes in the wake of tremendous pressure being built up on the government to raise minimum pension of EPS subscribers in line with guaranteed pension for the unorganised workers.
If you have a financial goal with 12 years of time horizon, you need to increase your monthly investment in the schemes to achieve your goal.
The first thing to do is to ask your employer to restructure your salary and switch back to giving the extra PF deduction amount as part of it.
ET Wealth takes a closer look at investment options within each asset class, and their historical inflation-adjusted performance.
EPF statutory dues for the month of December can now be paid by January 20, 2017.
While the government needs to balance growth and revenue, here is a look at some of the key tax-related expectations from the upcoming budget.
Navi Mumbai-based Jay Pandya, a salaried individual, will have to raise the equity exposure to be able to meet all his financial goals.
Ideally, savings should be taxed at the time of withdrawal only when the money is not ploughed back into another saving product.
Companies having 20 or more employees are required to mandatorily enrol those employees under the EPF scheme who have a salary of up to Rs 15,000 per month.
The reason: While one provides stability, the high return potential from the other can enhance the investor’s retirement corpus.
Analysts feel the govt may not make such a drastic cut lest it fuels the simmering resentment against the “minor inconvenience” caused by demonetisation.
EPFO allows you to access EPF even during the course of employment, but if the advance is misused, it will initiate full recovery of the amount.
Surjewala also targeted the govt for what he said its attempts to convert banks into police stations by asking them to carry out inquiry for deposit of over Rs 5,000.
Mistakes in dealing with other related areas can in fact derail otherwise careful retirement planning.
If you had initiated a transfer process from the 'online transfer claim portal' any time after March 1, 2017, you will have to resubmit your claim.
After considering expenses, Sankaran should invest the money instead of letting it idle and link it to his goals. His major goals include child’s education and retirement.
By raising investments and linking these to their financial goals, this couple can ensure a smooth financial journey into their retirement.
The unions include Indian National Trade Union Congress, All India Trade Union Congress, Centre of Indian Trade Unions and All India United Trade Union Centre.
The rollback is yet to be notified by the EPFO, and is expected to restore the accessibility of EPF balances for various needs of contributors.
A PF account becomes inoperative if the employee does not make an application for withdrawal within 36 months of retiring after attaining the age of 55 years.
Under the PMAY, the beneficiaries are provided credit linked subsidy based on their income levels so that the dream of housing for all can be realised by 2022.
The couple's goals include saving for future child’s education and wedding, buying a house and a car, taking a foreign vacation, and retirement.
During September 2017 to January 2019, as many as 2.08 crore new subscribers joined the ESIC scheme, the data showed.
Sam Raj's goals include building an emergency fund, taking a vacation, buying a car and a house, saving for his future child’s education and wedding, and his retirement.
This facility will be available to all those subscribers whose UAN is activated and seeded with the KYC details like bank account and Aadhaar number.
"The interest rate would be retained at 8.55 per cent for the current fiscal as provided in 2017-18 in view of forthcoming Lok Sabha elections," the source said.
According to Fincart, lack of investible surplus means Singh will have to put off the goals of his kids’ weddings and house purchase till a rise in income.
The EPFO has introduced a helpdesk for employees’ provident fund account holders to settle inoperative accounts.
To make NPS attractive, hope the PFRDA will remove the compulsory annuity clause as several investors avoid NPS now, mostly because of its compulsory annuity restriction.
BJP also took a jibe at Congress after some of its leaders, including Rahul Gandhi, sought to take credit for the Modi government's rethink.
Jaitley will make his statement regarding “the issue of tax proposals for EPF/Superannuation Fund” after the Question Hour.
Congress today staged a protest here seeking immediate reversal of the Centre's proposal to tax 60 per cent of Employees' Provident Fund (EPF) at the time of withdrawal and warned of escalating pressure if the demand was not met.
Finance minister Arun Jaitley will make a statement in Parliament on the issue that has brought the otherwise well-received budget much criticism.
Budget proposed to tax 60% of EPF corpus at the time of withdrawal, but deposits made up to March 31, 2016 would be exempted from the proposed levy.
This would lead to greater transparency and enable the pensioners to detect errors in calculation, if any and get them corrected faster.
NPS, which was opened for private sector employees in May 2009, has attracted voluntary investments worth only about Rs 2,800 crore.
At a time when everybody was expecting NPS to be EEE, govt has made EPF similar to NPS. But, the final word on EPF taxability is still not out.
The best way to tax savings is indeed to exempt them at the time of contribution, exempt them at the time of accumulation and tax them at the time of withdrawal.
This could cost the exchequer Rs 2,500 crore annually and an estimated 6 million people will become eligible for minimum pension of Rs 1,000 a month.
The government wants to hike the Provident Fund’s investments in equities to boost returns. Find out what this means for you.
Govt should now get moving on accounting and governance so that the real benefits of the liberalised asset allocation devolve to members of the EPF.
The unveiling of the mega pension scheme for workers in the informal sector marks a key milestone in the Modi government’s plan to widen the social security net.
The Tyagis goals include building an emergency corpus, saving for their children’s education and weddings, and saving for retirement.
Opt for the direct plans of the funds as they have lower expense ratios which help them generate higher returns compared to the regular plans.
The government has about Rs 3 lakh crore of pension funds and disbursement worth Rs 9,000 crore is made annually under the EPS.
Investment in ELSS qualifies for deduction under Section 80C. The lock-in period of these funds is three years. They have also outperformed comparable products by a wide margin.
The EPFO has amended the scheme by inserting a new paragraph to the EPF Scheme, 1952, to enable a subscriber to make down payment to buy homes.
"We have taken very cautious approach. Indications are very positive and economic growth is also picking up," Labour Minister Bandaru Dattatreya said.
The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals.
In the proposed amendment made by government last year, employees have been given one time option to join NPS in lieu of EPF, which is run by retirement fund body EPFO.
The ball is now in government of India's court. Modi’s call to look beyond the Budget will not work.
Here's the difference between the existing and proposed amendments to withdraw EPF money for buying a house and areas that need further clarity.
The yields offered by most pension plans by insurance cos are also not competitive when compared to existing FD (fixed deposit) rates, say experts.
Sanjay Sahu needs to streamline his existing resources and align them with his goals. His goals include building an emergency corpus, saving for his children’s education, etc.
"We are looking for stable growth, not spectacular returns. In the search for higher returns, we should not dilute the investment norms."
The investments of the NPS are already showing excellent returns. If more tax incentives are provided, more people will join it.
On the other hand, Indiabulls Real Estate, HDIL, DLF and Unitech were down by 1.85 per cent, 1.45 per cent, 1.34 per cent and 0.83 per cent, respectively.
The withdrawal facility from the PF account under the Scheme will be available to only those PF members who fulfil the prescribed conditions.
Besides the house, the Sharmas primary focus is building an emergency corpus, starting saving for their retirement, and buying a car.
EPFO has made it clear that student trainees getting stipend are not required to contribute towards social security schemes run by it.
These schemes could either be govt run or have private players operating in areas of pension, insurance and provident fund, a senior govt official told.
In 2015-16, 118.66 lakh claims were settled by EPFO while the numbers stood at 130.21 lakh and 123.36 lakh in 2014-15 and 2013-14.
The Supreme Court's decision has come in the wake of the special leave petition filed by the EPFO against Kerala High Court judgement.
NPS or National Pension System is yet to find widespread acceptance among the working population in the country, say investment advisors.
“We don’t want insurers and mutual funds to sell pension products unless regulated by PFRDA.”
Union Labour Minister Bandaru Dattatreya today denied having any differences with the Finance Ministry over the EPF interest rate.
CPI(M) member Tapan Kumar Sen slammed the "unilateral, undemocratic" action by the Ministry, saying it had completely ignored the unanimous decision.
Earlier in February, the Central Board of Trustees (CBT) of the EPFO had decided to provide 8.8 per cent interest to its over five crore subscribers for 2015-16
Labour Ministry sources said the Ministry will seek review of the Finance Ministry's decision as EPFO has sufficient income in 2015-16 to pay higher returns.
The finance ministry had last month reduced interest rate on small saving schemes including PPF scheme and KVP to 8.1% and 7.8%, respectively
Risk profile of a portfolio—aggressive, moderate or conservative—and the choice of instruments will affect the size of one's retirement kitty. Find out how.
Sukumar Singh works in Hyderabad. His goals include building an emergency corpus, saving for his children’s education, and retirement.
Though the Danges have a high amount of surplus and have saved aggressively, they should put off buying another house and taking a vacation for now.
Deepak Iyer is an IT professional and stays in Pune with his wife and son. With a high realty skew, they will now need to invest in equity to reach their goals.
The ministry, it further added, values the advice of NSC and takes appropriate action.
Mehul Das is single and employed. Her goals incude building an emergency corpus, saving for her own wedding, buying a car and a house, and her retirement.
A study by JLL India estimated the number of elderly people living in India to be more than 10 crore, and this is expected to grow by 3.8% every year.
Bandaru Dattatreya said at present, these provisions are applicable only to establishments which employ 20 or more people.
A quick turnaround in crude oil prices has again turned things on the head for global equity markets and risk-on trade. And Goldman has just painted an even more depressing picture for crude. However, that should be good news for India's macros. Or is it?
In the recent budget for FY17, the government has proposed that withdrawal in excess of 40% of the accumulated corpus will be taxed.
Taking another step towards ease of doing business, the Centre will launch tomorrow a common registration facility on e-biz portal which will enable employers to avoid filing separate EPF and ESI returns.
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