The completely avoidable mess that the finance ministry found itself in was rather surprising, says Debashis Basu.
Withdrawing the amount each time you move job(s), or otherwise, can make a huge dent in your retirement corpus.
In a placatory move, the labour ministry also said it was contemplating permitting withdrawal of all accumulations by Employees' Provident Fund Organisation's subscribers on grounds like purchase of house, serious illness, marriage and professional education of children.
A remarkable story which helped in transforming a bureaucratic organization, to a customer centric organization. This experience may inspire several government / private organizations to modify or adopt digitisation to transform their business, notes Professor N Ravichandran (retd).
A decision on the interest rate for close to 60 million active subscribers of the Employee Provident Fund Organisation (EPFO) is likely to be taken in the next Central Board of Trustee (CBT) meeting, starting on March 25. A letter from the social security organisation regarding the convening of the 233rd CBT meeting was sent to all the board members last week, soliciting their presence in the meeting. Although the venue and the agenda haven't been drawn out yet, sources familiar with the matter say that the interest rate is unlikely to go below 8 per cent level amid a rising interest rate scenario across the globe.
The Central Board of Trustees of Employees Provident Fund Organisation on Tuesday approved a scheme allowing subscribers to withdraw up to 90 per cent of the accruals to invest in Varishtha Pension Bima Yojana.
The argument put forth is that withdrawals from a long-term investment avenue leave investors with a lower corpus on retirement.
Remember, pension from EPS will be taxable at slab rate, reducing the post-tax income for people who remain in the higher tax brackets after retirement.
Retirement fund body EPFO is likely to approve this month a proposal to enhance its investments in equites to up to 20 per cent of the investible deposits from the current limit of 15 per cent. The proposal is expected to be considered and approved during the EPFO trustees' meeting scheduled to be held on July 29 and 30, according to a source. At present, EPFO can investment 5 to 15 per cent of the investible deposits in equity or equity-related schemes.
Don't solely focus on tax-saving alone.
The self-employed should invest in the National Pension System, a government-backed, low-cost retirement avenue where they can choose the mix of debt and equity that is right for them.
EPF has traditionally been the only tool for Indians, especially the salaried class, to save for their retirement corpus.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
The objective behind the move is to "retain the membership of PF subscribers and to address the social security needs at the time of unemployment."
NPS is a cost-effective instrument with low fund management and other fees. Unlike in mutual funds, investors get the benefit of tax-free rebalancing here.
rediffGURU and financial planning expert Colonel Sanjeev Govila (retd) answers your personal finance-related questions.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
rediffGURU and financial planning expert Colonel Sanjeev Govila (retd) answers your personal finance-related questions.
Electricity tariffs to go up as coal cess is doubled.
'Where in the world you get 12.5 per cent return of interest?'
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
'What is this new PF rule? Complete nonsense!' 'I want my PF money right now and not when I am 58 years old.'
The city police commissioner has promulgated prohibitory orders under Section 144 of Code of Criminal Procedure in the limits of Bengaluru city till the midnight of April 22.
Plan these investments well rather than just doing random investments at the beginning of the year or rushing in at the end, advises Harshad Chetanwala, co-founder, MyWealthGrowth.
Apart from this, employers may be allowed to deduct EPF contributions only on the basic pay of up to Rs 15,000, even if the employees' basic pay is above this ceiling. While on one hand this will allow companies to lower their wage bills, employees can also get a higher salary in hand.
Withdrawals from EPF and NPS to have same tax rates.
Since the imposition of lockdown on March 25 by the government to contain the COVID-19 spread, businesses have been facing liquidity or cash crunch, leading to difficulties in paying their mandatory provident fund dues.
"The prime minister's post is very dignified and he should not have made personal attacks, but I did not mind. He does not give answers, but only makes promises which are hollow," Rahul said, addressing an election rally.
Sandeep Shanbhag, a chartered accountant and director of Wonderland Consultants, a tax and financial advisory firm, discussed the impact of Budget proposals in a chat with Rediff.com's readers.
While reasonable safeguards should be built in, there can't be restrictions on the individual's right to leave her/his money to whoever s/he wants, notes Harsh Roongta.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
On retirement, you will draw a lesser amount as pension.
Supporting the striking truck operators, the National Democratic Alliance on Wednesday asked the government to withdraw the proposed service tax on transport booking agents.
The government has not done its homework or made any attempt to forge a consensus on this matter that affects millions of people in the organised sector, says Harsh Roongta.
The Employees' Provident Fund Organisation's (EPFO) apex decision-making body, Central Board of Trustees, decided to fix 8.5 per cent rate of interest for 2020-21 at its meeting in Srinagar on Thursday, sources said.
If the government decides to go back to the old regime where the EPF was not taxed but the NPS was, the latter will become an unattractive product.
The deduction will be higher and net take-home pay will fall.
Despite the equity booster, many would be uncomfortable about NPS.
