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No tax on EPF withdrawal amid COVID-19 Pandemic

Considering the financial stress that a lot of salaried individuals could be facing due to covid-19 pandemic, government allowed special provision for withdrawal from Employees’ Provident Fund (EPF) account on 20 March 2020. Since announcement Employees’ Provident Fund organization (EPFO) has processed about 1.37 lakh claims disbursing an amount of about 2.8 billion. The remittances of the moneys have already started happening.

Typically, funds withdrawn from EPF account before the completion of 5 years of continuous service attract tax, except in certain conditions like a medical emergency or where the worker or the employer finish up their business or for the other reason beyond the control of the employer. However, even just in case you opt to withdraw funds from EPF account due to covid-19 pandemic, such withdrawal are going to be exempt from tax. Here is what proportion and the way you'll withdraw the funds.


How much you'll withdraw?

You can withdraw up to 3 months salary (basic pay and dearness allowance) or 75% of the entire EPF balance in your account whichever is lower. 

As an example , if your EPF balance is 3 lakh and your basic pay and dearness allowance is 30,000 per month, you're eligible to withdraw lower of 90,000 (3 months salary) or 2.25 lakh (75% of EPF balance), meaning you'll withdraw up to 90,000. If you would like lower amount you'll make an invitation accordingly.

How to make withdrawal?

If you would like to withdraw funds out of your EPF account:

First login to your EPF account using your Universal Account Number (UAN) and password.

Once you login, attend online services tab and click on on “Claim (Form-31,19,10C & 10D)."

You'll only be ready to proceed further and make claim if you've got updated Aadhaar number together with your EPF account. just in case your Aadhaar is updated with EPF account, it'll ask you to enter four digits of your checking account for verification.

After verification of checking account, click on the choice “Proceed For Online Claim".

Next is to pick the applicable form for withdrawal i.e. Form 31 from the sink list. If you're withdrawing fund thanks to the financial hardship due to covid-19, select the aim as “Outbreak of pandemic (COVID-19)" from the sink.

Now you're required to enter the quantity you would like to withdraw and upload scanned copy of cheque and enter your address.

Click on “Get Aadhaar OTP" to proceed further, enter the OTP received on Aadhaar linked mobile and submit the request.

EPFO is saying to settle the request within the three working days.

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Location: New Delhi, Delhi, India

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