Want to withdraw from your provident fund account? Here's how!

A provident fund (PF) is basically a plan to provide financial security after retirement. It is, therefore, not advisable to withdraw any amount from one's provident fund account as PFs are primarily meant for retirement planning, and retirement planning is the most important goal in any person's life.


"No need to say one should avoid doing so unless there is a great emergency, as the amount should be utilized post one retires or in case one stops working and his/ her earnings have depleted. For other emergencies, one should look at money frominvestments in other instruments like debt funds, liquid funds or a savings bank account, etc," suggests Anil Chopra, Group CEO, Bajaj Capital.

In fact, there are various advantages of investing in a provident fund (PF). Generally, the return on provident fund is higher than inflation, and is totally tax fee. Thus, withdrawing out of it would have the following consequences:

1) Retirement planning would go haywire

2) Tax-free status would be lost because that money cannot be put back. For example, let's say, someone has a balance of Rs 50 lakh in his provident fund account, and he wishes to withdraw Rs 25 lakh out of that. This amount of Rs 25 lakh cannot be put back into it later, as it is not allowed as per rules.

Therefore, "withdrawal from a PF account is generally discouraged, as the purpose of opening it and accumulating money there is mainly for the second innings of your life, which is post retirement," says Chopra.

Nitin Vyakaranam, Founder & CEO, Arthayantra.com, is of similar opinion. "Withdrawing PF stands out as the classic case of lack of prioritization and holistic approach in our financial decision making process. By making withdrawals from the PF to fund other goals, we end up pushing our retirement age or making higher contributions towards building retirement fund during the last few years of our employment," he says.

However, in case one wants to withdraw money from his/ her PF account, the rules for the same are very stringent, which also vary as per the types of provident funds. In India PFs are of three kinds:

a) Public Provident Fund (PPF) - For general public

b) Employees Provident Fund (EPF) - For private sector employees

C) General Provident Fund (GPF) - For government sector employees

In case of PPF, which is normally meant for 15 years, withdrawal is allowed before that also, but under very stringent norms. For example, no amount can be withdrawn at all for the first six years. After six years, the amount equivalent to 50 per cent of the balance, which was there more than 3 years ago, can be withdrawn. Thus, the entire money cannot be withdrawn before the end of 15 years. Even after 15 years, it can be rolled over for another period of 5 years and after that every five years it can be rolled over or closed.

Similarly, in case of EPF or GPF, withdrawal is not allowed generally unless one has given up working or wants to be self-employed, etc. As per EPF rules, you are allowed to withdraw money only if you have no job at the time of withdrawing your fund and if 2 months have passed. Only transfer is allowed in case you have switched to a new job. Some people, however, withdraw the EPF after 60 days of leaving the organization, stating that they don't have any job, but this is illegal as per the EPF rules, if you are doing so after switching to a new job.

Thus, if you have no job at the time of withdrawing your fund and if 2 months have passed after leaving your organisation, then you are allowed to withdraw the fund. A declaration is required to be given stating the reason for the same. Otherwise, partial withdrawal is allowed in certain cases, which is in the form of loan, where one has to pay back that amount later and before that, has to state the reason for opting for withdrawal, for example, self or daughter's marriage, buying a home, education of self or children, medical treatment for self or family, among others.

There are certain specified criteria under which partial withdrawal is permitted. In case of education or marriage, for instance, the employee should have completed at least 7 years of employment or service. The maximum aggregate withdrawal can't exceed 50 per cent of the total contributions made by you and withdrawal can be made only thrice during a person's total service tenure. Proof of education or wedding is also required to be submitted.

Likewise withdrawal is permitted for medical treatment of self, spouse, parents and children. In this case, however, there is no restriction regarding the number of years of service. But the maximum amount one can withdraw is six times the basic salary and proof of hospitalization is required.

In case you wish to withdraw from your EPF account for purchase/construction of a house, then you need to have completed at least 5 years of service. The maximum withdrawal amount is 36 times your monthly salary (for construction of property) and 24 times (for purchase of property). In this case withdrawal is allowed only once during the entire service tenure.

For alteration or renovation of house, withdrawal is allowed up to 12 times your monthly salary and only once during the entire service tenure. But the house need to be registered in your or your spouse's name or should be owned jointly.

If you need to withdraw for repayment of home loan, then you should have completed at least 10 years of employment. The maximum withdrawal amount is 36 times the monthly salary of yours and withdrawal is allowed only once during the entire service tenure.

If one has retired or stopped working, he/ she needs to fill a PF withdrawal form and share his/ her bank account number, which has to be counter signed by the employer. After this, the money is directly sent to one's bank account. The process takes longer in case of EPF - anywhere between 2 weeks to may be up to two months also.

"On the other hand, if you have a PPF account, withdrawal is very easy after completion of 15 years. You can collect the demand draft or cheque by going to the post office or bank on the same day or get the money transferred in your bank account. Thus, one can get the money in a day's time," informs Chopra.

Also, if one wishes to withdraw before the end of 15 years, let's say 6 years, the amount which can be withdrawn as per rules will be calculated, and by filling an application in the prescribed format, it can be taken out maximum in one day's time. Thus, withdrawing from PPF is easier than withdrawing from EPF or GPF

Courtesy: ET 

Management Problems of Today and Further

This new “Flat” world, non-job environment is representative of the disruptive, discontinuous change that is taking place now in the foreseeable future. It represents a new paradigm, a new way of thinking about the workplace.

Some things never really change:

A powerful charismatic leader is having problems. A well-known consultant is called in to help. The consultant notices that the leader tries to handle all problems and conflicts of his people himself. People queue up before his office; because he is overwhelmed he cannot handle all the business. So the consultant has a private talk with the leader and tells him to structure his organization by delegating authority, empowering subordinates to handle the workload. These subordinates should be selected not only on their leadership abilities, but also on their character. They should be truthful not driven by material gain. The new structure should resolve all daily issues at the lowest possible level; only the big and difficult issues should be brought before the leader. He should focus on strategy — on dealing with the higher authority, on establishing new approaches and teaching these to the people, on showing them the way to go and the work to be alone. The case states that the leader listens to the consultant and carries out the reorganization which is a success and the consultant returns home.

All the speculation and speeches about the challenges in the new century have come and gone. Now trying to effectively manage 21st century organizational has become the harsh reality. Ask anyone today management professors, practitioners, or students – what the major challenges are in today’s environment and the answer will be fairly consistent: An uncertain economy and turbulent geopolitics preoccupy everyone’s concerns. However, at the organization level, advanced information technology, globalization, diversity, and trying to solve ethical problems and dilemmas come to the fore. These are unquestionably major issues facing contemporary organizations. However, the basic premise and assumptions of the fields of organizational behaviour in particular are that managing the people, the human resources of an organization have been, are, and will continue to be, the major challenge and critical competitive advantage

Courtesy: Citemanhr.com by RamaRao

Five Signs You May Get Laid Off

Anyone who thought the job market was getting back to normal received a nasty shock on Monday when Goldman Sachs laid off approximately 50 people, many of them managing directors. These and other layoffs may have caused some people to wonder if they might be the next ones on the chopping block.

Getty Images

CNBC.com spoke with human resource experts to find out the five tell-tale signs that you may need to update your resume.

1. Mergers. According to career coach Cheryl Palmer, mergers that result in duplicated job functions can spell trouble. “If you have a position that has a counterpart in the acquiring company, your job could be very much in danger,” she told CNBC.com in an e-mail. “Generally speaking, the acquiring company will eliminate duplicate positions.”

2. Passed Over for Promotion. Fred Cooper of Compass HR Consulting told CNBC.com that if “you are passed over for an internal promotion where your qualifications (not just seniority and longevity) are in fact greater than those of the one selected,” then the powers that be may have already decided that you’re on the way out.

3. Sharing Your Files. “A tell-tale sign you are going to be laid off is being asked to share your files, and update another team member on all of your projects," Debby Carreau of Inspired HR told CNBC.com. “If you are asked for passwords, client lists and contact information, this is further evidence the organization is preparing to have someone backfill your position.”

4. “Special” Projects. Fred Cooper told CNBC.com that if you’re assigned to a short-term project that has little — or nothing — to do with your regular job, then you have good reason to be wary. “When completed, you may not have a job waiting for you,” he said. “Even long-term special projects have similar risks associated with being assigned that ‘honor’.”

5. There’s a Computer That Can Do That. Palmer said that any job that can be automated is a dicey proposition for the human being that’s currently performing it. “If the type of work that you do can be done by a machine instead of a person, you may need to look for another type of job,” she said bluntly. “It's usually just a matter of time before your company decides that a machine can do your job for less money.”

Luckily, there are some things you can do that can help you survive a human resources bloodbath. According to Morgan Norman, co-founder and CEO of theWorkSimple social performance application, “requesting real-time feedback, documenting and tracking your goals, sharing your work socially, and building a visual portfolio of your accomplishments are all ways you can prove that you're an asset to the company and not someone who should be handed a pink slip.”

Courtesy: Daniel Bukszpa @ CNBC.com

Budget 2012: You get to save Rs 22,000 in Income Tax, but be ready to spend more on everything else

He's attempted to put more money in your pockets by nudging tax exemption limits upwards. But that will still prove to be loose change when you consider that the finance minister hopes to shore up revenues by making almost everything you set out to spend on more expensive. In already inflationary climes, that's not going to help bump up consumption. "The signals are not good considering consumer demand is anyway low due to recurrent price hikes on account of commodity inflation and other macroeconomic conditions," says Manish Sharma, managing director, Panasonic India. "Demand will get dampened and we expect the (consumer durables) industry growth to be hit by 10-15% this year, after last year's dismal singledigit growth rate," he adds. Here's why Sharma is so downbeat. The FM's income-tax proposals will save a maximum of Rs 22,660 for individuals. Now counter that with the relative havoc his move to tax all services (except those on a negative list) and hike the service tax as well as excise duty from 10% to 12%, will wreak on prices of consumer goods.

HR’s New Method of Stress Busting - Walk on Fire

By V S Rama Rao

Organizations are taking many initiatives to help their employees address issues arising out of stress at the workplace, the latest stress busting measure that HR is resorting to increase morale which will help employees’ true potential to come out and will help them in their work. HR initiatives taken is gaining immense prominence at the workplace.

It expects the employee to do what we can call is “walk on fire”. Fire – walking is the act of walking barefoot over a bed of hot embers or stones. It has a long history in many cultures as a test or proof of faith and is also used in modern motivational seminars and fund-raising events as a self empowering, motivational activity. There is a lot of fear in our minds. The kind of result we obtain depends on the way we think and how we behave. We are empowered with lots of energy and power within ourselves and once we realize that power, every fear fades away and success becomes achievable. Talking about how an organization came up with the idea of getting their employees experience this unique exercise. A company had started a new business vertical in India with new product lines. At that time, employees were subjected to a lot of pressure due to added responsibilities they had to shoulder, in a quest to attain superior delivery. It was important to make, employees acquaint with this concept and imbibe in them the need to understand that success, under stressful times, can be achieved through self-confidence and persistence.

Towards the end of the day, one feels more rejuvenated and self-reliant about one’s skills and self. So, how has this initiative helped people fight stress and made them feel more confident about themselves? A few endeavors may seem difficult at the workplace, but when you actually attempt it, you may find them easy. The fire walk too seems to be impossible at the start, but then the misconception gets shattered eventually. Employees are more confident of themselves now. They have grown more competent and are more interested to work with the best of their efforts to get the best of their output. Individual and company goals seem to run hand in hand in the minds all employees.

HR in the organization creates impossible situations through our mental blocks. This program hammers out those blocks and makes the mind more stable, erases fear and helps take more practical decisions. HR says they can certainly challenge and break our limits. They also say they need to find out their real potential and the power hidden inside. Once we do it, we can perform well in ways more than one. We make the participants focus and concentrate on the mission are targeting. This requires patience and concentration. On completion of the seminar, the participants gain confidence, patience and become more goal oriented.

The increasing popularity of this concept is that it says, people keep harboring guilt about relationships, financial problems, health issues etc. But the fact is that all guilt must be eliminated if we want to realize our true potential. Strong conviction and guilt make uneasy companions. They work for the complete transformation of individuals that includes the acceptance of accountability and responsibility.

So if you feel that stress at work or home is taking its toll on you, go ahead and experience this mind boggling exercise of walking on fire and unleash the power within you.

Courtesy: citemanhr.com

Attitude / Gratitude – An HR’s Wishlist for Santa Claus by NABOMITA MAZUMDAR on DECEMBER 22, 2011

Dear Santa Claus,

Please be assured, that I have been a good HR all this year. I remain unaffected by the attrition and reviews. My chief aim was to increase the employee engagement score as declared by Hewitt. I screened every area and thought process within my reach, to click that path-breaking program, that will keep my employees happy. The distribution of benefits and career growth opportunities went to the deserving, to the best of my knowledge.

Industry in general was bright. when the year started. Hence, we were hiring in full swing. Towards the mid-year, the conservative out-look shadowed every talent management plan. Apart from certain roles, we remained disciplined towards new-hires. Considering this good behaviour, please include the following gifts for me :

• A training budget for the HR Team
• Performance reviews beyond the recency
• Greater focus on Social Learning without speculations for the ROI through a near term window, but a long term benefit.
• Life is ‘Wow’ attitude in our employees
• Business leader’s inclusions and not intrusions in HR functions.
• A think-through attitude and not a think-without, during the brainstorming sessions
• Agreed, accepted and an ‘owned’ goal path, not just a pre-destined one.
• Grant us a brain-gain , even through an attrition. When we build an alumni, we mean them.
• An honest salary-survey
• An Efficiency Dashboard that focusses on not just the task completed or even allocated, measure the incremental increase in performance and acknowledge the supporting features
• An implementation after a training program, including the behavioral ones.
• As we design the objectives for the next year, please let it be, unanimously echoed, from both the managers and reportees.
• Wishes can not be all expressed and contained in a list. So please allow us to follow up. We mean no harm, when we ask for an update or an upgrade.

Our wishes are few, so are our needs. God bless you, your elves and reindeer, for we acknowledge not just the leader but empathize the team contributing towards the success. Please let the world know, we remain your humble HRs

With best regards

Humble HR

P.S.: A request to the readers of this open letter, please add on to what has been missed. Remember, Santa is listening

more at http://www.citeman.com/19235-attitude-gratitude-an-hrs-wishlist-for-santa-claus.html#ixzz1hWu8odlp

A Report on hiring activity in India

THE MACROSCOPE

SECTORAL ANALYSIS

A deeper analysis of the index shows that Nov-11 has been good in terms of hiring. The festive season had a major impact on recruitment activity and this has recovered in November. Hiring activity in the Construction, Auto and Banking sectors was similar to Sep-11 but was 20% , 34% and 21% higher than Oct-11. ITSoftware, BPO and Telecom sectors on the other hand exhibited strong hiring trends with the job speak indices moving up by 29%, 18% and 14% in Nov-11 over Oct-11. The three month moving average index however indicates a more stable scenario.

FUNCTIONAL AREA ANALYSIS

A month on month analysis of key functional areas shows that the demand for professionals in Production and Software services moved up by 30% in Nov-11 over Oct-11. The demand for professionals in Sales, Accounts and HR moved up by 35%, 31% and 22% respectively over the same time period. The three month moving average indices however for the same sectors shows a marginal increase by 2%, 4% and 1% in Nov-11 over Oct-11.

source: Naukri