How to withdraw from EPF during the time of Corona Virus

Amid coronavirus lockdown, people are facing a financial crisis. Looking at such a situation government of India announced that people can withdraw some amount from their Employee Provident Fund (EPF). According to the amended rules, an EPF member can withdraw an amount equal to three months of basic and dearness allowance (DA) or 75 per cent of the credit balance in the account, whichever is lower. EPF is a popular saving scheme which is introduced by the Employees’ Provident Fund Organisation (EPFO) under the supervision of the government of India. It facilitates salaried employee to save money for the future which can be used after retirement or in case of emergency. In the fund both employee as well as employer extend 12 percent each of the employees’ monthly salary, as their share of contribution towards EPF. 

Eligibility to Withdraw the Money

All the employees having an EPF account can withdraw the money in advance during the pandemic time, all they need to have is Universal Account Number (UAN) which is allotted by EPFO and linked Aadhaar, PAN and bank account with their UAN. Also, an employees bank account with IFSC Code should be linked with UAN.

How Much Can You Withdraw?

Every EPF account-holders can withdraw money, wither three month’s salary (salary = basic pay + dearness allowance) or 75% of total EPF balance in your account, whichever is lower.

Let’ say, if Mr Y’s monthly salary (basic pay and dearness allowance) is Rs. 40,000 and his EPF account holds Rs. 3 lakh, then you shall be eligible to withdraw: 

  1. Three months’ salary = 40,000 x 3 = Rs. 1.20 lakh or
  2. 75% of total EPF balance held at the time = 75% x 3,00,000 = Rs. 2,25,000 lakh

In this case Mr Y will be eligible to withdraw Rs 1.20 Lakh (three month’s salary) as it is lower than 75% of total EPF balance in the account.

It is worth mentioning that you have to make a request in advance to withdraw the money due to COVID-19 as it can only be done once.

Procedure For Withdrawl

The EPF can be withdrawn either by writing an application to the Commissioner seeking an advance from their EPF account in respective jurisdictional EPFO’s office or visiting the Member e-Sewa portal. Follow the given process to apply online:-

  1. Login to the EPFO’s website and login through a UAN (Universal Account Number).
  2. After that click ‘Online Services’, from that choose the option ‘Claim (Form-31, 19 and 10C)’
  3. In the next screen members details will be displayed and system will ask for ‘last 4 Digit’ of the member’s bank account number
  4. Now, the member should click on ‘Proceed for Online Claim’
  5. Remember  to apply for ‘PF Advance (Form 31)’
  6. In the section of purpose fill ‘Outbreak of pandemic (COVID-19)’
  7. Mention the amount of advance required, provide your address and a scanned copy of bank cheque
  8. For verification request for an Aadhaar OTP 
  9. Now, enter the OTP which you received on your registered mobile number 
  10. Submit the application

After the successful submission of OTP, application will also be submitted and the amount will be credited in your account if all the EPFO’s details match. To check the status of your clain click on Track Claim status’ under the ‘online services’ tab.

Tax Relief

In make ends meet employees are forced to dig out their savings due to pay cuts and job loss. Government introduced a policy where people can withdraw some amount from their EPF and such withdrawal will be exempt from tax. Prior to covid-19, if a person decided to withdraw the funds  before the completion of 5 years of continuous service they were charged to tax in the year of withdrawl.

Keep In Mind

Apart from the aforementioned guidelines, make sure to check whether your organisation is exempted. If your organisation is exempted then you will have to contact your employer for the withdrawal. Establishments who seek exemptions and create EPF Private Trusts are called exempted establishment.

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