Introduction
Many people think that the amount contributed by them to the pension fund will be the same in the actual scenario. it’s not like that because the pension withdrawal calculation is different. In today’s article, I will be explaining to you the pension withdrawal calculation and rules so that you will get to know about the genuine amount of pension at the time of settlement. Along with that some common mistakes because of which you receive less money or some mistakes committed by HR or payroll practitioners because of which employees have to handle the repercussions of less money during settlement.
In the end, you will get to know about what to do if the contribution received is less and the chances of such mishaps are very high so how you can receive the rest contribution amount. Hello friends, I am Manish Kumar yadav.
Why My PF Amount Is Less? How To Claim Full Pension Amount From PF Department
Guys look at your passbook, you can see three columns where contributions are placed, that is employees share contribution, employer share contribution, and pension contribution. And as you know from employer contributions the eligible members of EPS get 8.33% of PF wages. If the total pensionable service is more than 10 years then you become eligible and after then you cannot take the withdrawal of pension. When you turn 58 years of age then you can start your pension. if your service is less than 10 years then at the time of retirement or after leaving the job wait for 2 months to close the EPS account and then you can access all the benefits of pension withdrawal. This withdrawal benefit is also known as return of contribution means the amount contributed by you should be returned to you as per your contribution. So you got to know the fact that the amount of the contribution made by you is shown in the passbook Is not the amount which you will get exactly you are eligible to get what exact amount?
For this, you need to know some basics about EPS Since September 1st Sep 2014 members who are contributing towards their EPS have been imposed by the government a ceiling of 8.33% of rupees 15,000 which is equal to rupees 1250. So, you have to tell the PF department that you want to contribute your full wages otherwise, it would not be done. Maximum EPS contribution should be rupees 1250 and not more than this so kindly check your passbook if the amount contributed is more than rupees 1250 then it is wrong and afterward you will face a problem. The second important concern is that after 2014 if you are becoming a member for the first time and your salary is above rupees 15k per month which is common in the software industry then you are not eligible to become a member of EPS. So if EPS is contributed from such employee salary then it is wrong.
Is TDS Deduct On Pension Amount?
Keep a check that there is no interest in the pension shares. Whenever interest is paid on PF and not on Pension Along with that, you can not withdraw advance from pension share & if you want to advance then the maximum you can withdraw from PF and not from the pension fund. On any day when you are withdrawing your money from your pension. No TDS will be deducted from it. People think that TDS might have been deducted Because they have not submitted their 15G form that's why the pension amount got reduced But it’s not like that because no TDS is deducted from the pension When the money of pension got transferred from one account to another Many people questions that their past contribution of pension is not shown But PF amount is shown. So friends keep in mind whenever we transfer pension from one account to another Only service history gets transferred and no actual money is transferred So if zero is shown in your passbook then it’s Not a problem last important point whenever you go for a withdrawal of pension amount Whatever your actual amount no withdrawal can be done on that basis You will get a pension withdrawal according to EPS 1995, table D. Then the question arises what is table D.
How to Calculate PF Withdrawal Calculations?
Let’s understand it from the EPS withdrawal calculations. if your overall service is of 10 years and you have left the job After two months exactly from the day you have left the job You can close your EPS account and are eligible to take the settlement amount. Now suppose you have service of 8 to 9 years or less And you have attended the age of 58 years now you cannot become eligible for a pension again you can withdraw from your contributed corpus further 58 years or one-month contribution will go into PF And your EPS account will be closed in these two conditions you can withdraw your whole amount that money will be withdrawn as per EPS 1995, table D
So friends see this table clearly where in one column you can see the number of years of service Based on which a factor is given by multiplying with the factor whatever will be waged at the time of exit will be given now the question comes about the calculation of years if a person worked in two or three companies let's take an example. Suppose a person who worked in company A for three years left company A and joined Company B and worked for four years. In Company B there were no provisions for PF Then joined company C and worked for four years. Now you can see the overall pensionable service is seven years. Which is calculated As 7 years for the company (a, b & c)And your factor will get multiplied by seven years. Point to be noted that after Company A, You haven’t taken your full withdrawal in any case, you have withdrawn the full amount from EPS A/C.
Then that part will not be added to your service. You can ask one more question in this regard i.e., Sir, I’m having a service of 5 ½ or can say 6 ½ years than in this case the rule of 6 months or round off will be of great use, For example, you are having a service of five years five months. So it will be rounded off to 5 years if you are having a service of 5 yrs 7 months. Then it will be around 6 years. So there is a peculiarity to this rule again one example comes in a scene you will see if anyone has service of 6 months or lesson he is applying for his pension withdrawal. Then his claim will be rejected The reason behind this is that below six months the round of rule claims it to be 0So even though a person worked for 5 or 5 and a half or 4 months of service then also that person will not be eligible for Any withdrawal Similarly one person is saying that I have had a job for nine years and seven months but still the claim for withdrawal is getting rejected.
What is the reason behind Pension Round-off?
The reason behind such withdrawal is 9 years plus 6 months in any service is round off to 10 years they become eligible for the pension so withdrawal is not possible Now take one example. suppose your pensionable wage during exit was Rs 15 K Which is the maximum ceiling amount And the year of service provided by you is 5 years 7 months. So it will be rounded off as six years of Service. Now if I will see the factor of 6 years. Then the factor will be 6.07As per the 10 C withdrawal amount will be Rs. 91,050 (6.07×15000)But there is a big flaw to this which an employee can take advantage of The flaw is that the calculation is done on wage exit. Now suppose for 5-7 years you have contributed Rs.8000Or in last you have shown your monthly contribution of rupees 15,000So the calculation for last five to seven years It Will be done based on rupees 15,000Then in that case PF officials possess a power Where they can make necessary adjustments with these wages.
In no case, they will pay much more than your contributed amount. So some people try to misuse this clause but most probably PF department’s huge amount is contributed. Suppose contributed amount is Rs.10 K and after calculation, it is Rs. 40 Then your Rs.40 K will not be approved again keep one more case in your mind This case is for the people who joined the company in 2014If you have joined the company before 2014 and not completed the 10 years also our withdrawal will be based on the weighted average because in 2014 and before the ceiling wage for PF was Rs. 6500So rule states that whenever there is a change in ceiling wage amount then you have to take a weighted average up to that let's understand this with the help of an example suppose an employee joins an organization in the year 2012
Exited in the year 2020 where he served for 8 years for the first 2 years, the contribution was done on the ceiling wage is Rs.6500And in the rest of 6 years the contribution was done on the ceiling wage of Rs. 15 so the weighted average will be calculated as2 years multiplied by Rs.6500 add 6 years multiplied by Rs. 15K total divided by 8This means the salary at the time of exit will be Rs.12,875Now it will be multiplied by the factor of 8factor of 8 is 8.22 that is Rs.12,875 * 8.22Which equals Rs 1,05,832 at the time of withdrawal service less than 10 years will yield exactly what withdrawal amount
We will learn this in 1 minute but friends even if the service is more than 10 years you would have hoped for rupees 7500 as the maximum pension Because as per today's rules maximum pension is rupees 7500 only but you will be shocked after listening to this That this is also a big call for because maximum YouTubers or bloggers gives a wrong calculation for a pension have also given a wrong calculation exactly I cannot say that it was wrong but it was incomplete from our side also And in actual we are about to make a video on that maybe it will be the next video when you will see your calculations today’s date also there is no pension amount to rupees 3000 or rupees 3500We will also talk about how much you will get in pension withdrawal but before that keep in mind friends contributing towards PF cannot make you wealthy.
Let's Take An Example.
Now you have understood the rules. So, let's again calculate for this particular employee
So watch it carefully that an employee joins in July 2015And the last contribution is done up to May 2019This means an employee served for exact 4 years EPS Wage during exit is Rs.10,960Friends keep in mind you have to watch for EPS wage and not EPF Overall calculation is done on EPS wage only as per this, the factor for 4 years is 3.99 Multiple 3.99 with Rs.10,960 which equals to Rs.43,730
The actual contributed amount is Rs.23,395This means if Rs.43,730 is not approved. Then also the employee is eligible to get somewhere around Rs.23,395But when the employee gets to know about his settled amount Then it was only about Rs.11737Which after knowing about every rule and regulation Which you already know is wrong. So the low amount can be backed by 3-4 genuine reasons but in most cases the amount is wrong. So how you can take your rest amount back I’m gonna tell you but before that do this little exercise Have you ever tried to withdraw your money from EPS Put down your comment in yes or no And along with that also tell us about The amount in your passbook which is contributed to your pension and during withdrawal how much you got You can mention these two amounts in the below comment box will be of great help for the entire community.
What Are Basic Mistakes While Claiming EPFO Pension?
So as you already know maximum cases if the amount is less than it’s the PF department's fault But in a few cases, you as an employee or HR also commit a mistake few casa es in this regard are You applied for a withdrawal before transferring the money second, keep in mind about the round off rule which I told you where you are having a service of 1 year 5 months and you are calculating it as two years check that also the third mistake that can be committed by HR/Payroll professionalizes our age is 58 years and you still your contribution to PF is whenever you will make the withdrawal, the contribution made after the age of 58 years Will not going to get it. Apart from this when, you are joining a company and your salary is Rs.15k or more then money should not be deducted from the name of EPS
And if the contribution is deducted in the name of EPS on wage Rs.15K And you are contributing to PF and pension also in more than the wage that is Rs. 15kThen also this case is wrong. If you haven’t been given any option specifically way back years. Because the maximum contribution in your PF is only Rs.1250 only And the last reason could be that in the last 6 months you worked for a few many days only that’s why the salary is computed less. It could be that the PF department can use your last salary withdrawn for calculation purposes these reasons can lead to errors in the calculation part. Now if your amount is less because of any mentioned above error Then what you will do And if genuinely your amount is less than what you will do If the amount is Less because of the above-mentioned error then If u haven’t transferred the money then do it first Next, if you have attended the age of 58 years then also your contribution is happening Or contribution was not needed to be done because you joined after 2014That to more than Rs.15k wages.
Conclusion
In all these cases you have to submit a form called Revised form 3AWith the PF department and rectification is needed to be done in case of the wrong contribution in another case, the members are left with a major solution is to file a PF grievance but friends it's important to know Your amount is less then you will get to know About the reason to file a grievance. So kindly mention in the grievance The actual amount expected and the received amount It’s possible then kindly attach a copy of your passbook. So that the PF department could know about the difference between The contributed amount and the withdrawal amount And the 6th reason which I mentioned to you That the last month's wages was less due to less work And that’s why your overall withdrawal is less Then you should mention this to the PF department the Then consider your exit wages with NCP days try to do it with the help of proper calculation Suppose out of 30 days you worked for 15 days and your salary calculation is done on that basis only then they will double it and in that manner, the calculation will be done and touch wood if it does not happen with your you have not done any withdrawal yet then do this little task Kindly share this video with at least one friend of yours who is a PF member chain will make a chain so that few people out of thousands whose PF amount was less will get their rights. right amount from the PF department.
Jai hind, Jai Bharat.
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