Covid-19 : EPF Special Withdrawal Window

Last week, Finance Minister has indicated that, due to Covid 19 Virus crisis lot of people will face liquidity crisis and to sail through the tough situation the Government has allowed the EPF subscribers to withdraw certain balance for their Emergency use.  Though there are no eligibility criteria as everyone can withdraw, but there are certain limitations on the amount of withdrawal. The entire process is online and it might take 3 to 5 working days for the credit to happen.

Prerequisite for availing online claim services

What’s the online process?

1. Login to the UAN website (https://unifiedportal-mem.epfindia.gov.in/memberinterface/)
2. Go to Online Services
3. Under Online Services click on the Claim Form
4. Enter last 4 digits of your registered bank account and verify
5. Select PF Advance (Form 31) from the drop down
6. Select purpose as “Outbreak of pandemic (COVID-19)” from the drop down
7. Enter amount required and Upload scanned copy of cheque and enter your address
8. Click on “Get Aadhaar OTP”
9. Enter the OTP received on Aadhaar linked mobile.
10. Claim is submitted

How much you can withdraw?

You can withdraw 75% of your PF balance or last 3 months Basic + DA or the claimed amount whichever is lesser.  For example if your PF balance is Rs.80, 000 so 75% of eighty thousand is Rs. 60,000 and your Basic + DA per month is Rs. 25,000 so 3 month’s salary is Rs. 75,000 so you are eligible to withdraw up to Rs. 60,000.

Is the amount taxable?

• The withdrawal will be considered as income of the individual, so the funds withdrawn from the EPF account before 5 years of continuous service are fully taxable as per your tax slab.
• There will be TDS if the amount to be withdrawn is more than Rs. 50,000.

Should you withdraw?

Well, it all depends on your current situation. If you are in need of money and don’t have any other source then no other option. But if you are thinking that as the Government has given an option let’s use the money, please reconsider your decision.  PF is a great source to manage post retirement expenses and a huge PF Balance will provide you a sence of security and change your perspective about Retirement Living.

EPF is meant for your retirement and it’s a great product with very high interest rate (8.5%) at the current juncture. The return from your PF is not taxable, provided you have 5 continuous years of service. If you could manage next few months without any difficulty or have alternate source please continue your PF and do not withdraw.

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