PF Withdrawal Amendments Due to Corona Virus Pandemic
As we all know the whole world is going through with the Pandemic and its spreading drastically in the world. If we talk about country like India so only one thing came in mind i.e. liquidity because our economy is cash based economy and the people of India needs to have more cash with them self and for ensuring that our finance minister has announced the relief package for the country & amendments in withdrawal of PF is one of them.
It’s crystal clear that due to long lockdown people has started facing issues in terms of money and some of them are becoming Jobless. In this crucial time people don’t have money to survive so here came the relief package from the GOVT. for salaried employees over the PF withdrawal on 24th of March.
Sowe will tell you how much you can withdraw money from PF fund. First of all, let’s understand amendments for PF withdrawal rules.
Amendments announce due to Corona Virus Pandemic for withdraw of PF Rules
- The finance minister said in her announcement that the employee can withdraw up to 75% from the balance of his EPF account as an advance (But this amount should not be more than 3 months basic Salary plus DA amount of the employee)
Understand with diagram and example to give you more clarity.
|75% of Outstanding Balance in EPF Account|
|PF Withdrawal Rule|
|OR||Whichever is Lower|
|(Basic+DA) of 3 Months|
If you have PF account balance is 2 lakh and your per Month Salary plus DA is 30,000 then PF advance will be calculated as follows:
75% of 2 Lakhi.e. equal to Rs. 1,50,000/-
3 Months Salary (Rs. 30,000 per Month for 3 Months i.e. equal to Rs. 90,000/-(In this two conditions you can withdraw lower amount i.e. Rs. 90,000/-)
There are some benefits of withdrawing PF money in this Pandemic that a PF account holder can availed. Here are some Benefits given below:
1. Non-Repayable -If you withdraw the PF amount due to corona virus pandemic there is no need to repay the PF amount in future.
2. Not Mandatory to submit Proof – In the normal case of PF Withdrawal. A PF account holder need to submit some proof but if you want to withdraw your fund due to Corona virus Pandemic there is no need to submit proof.
3. No Tax Liability – In the Normal case If someone want to withdraw the PF before 5 years there are some tax that needs to pay by the account holder but in this case PF holder will not be required to pay tax on it.
Here are several points that are needed to be taken care off before raising request for PF claim.
1. Updated KYC– In your PF Account Your KYC detail should be updated (i.e.:-Your Name, PAN, Aadhar, Photo, Sign, Bank Detail Etc.) if your KYC is not updated then your claim request will not be processed.
2. Bank Account number– Check your bank account detail it should be Active and if you want to change the details then one should do it before raising the claim for PF.
3. Mobile number linked with Aadhar– This is very important that your mobile no must be linked with Aadhar because when you request PF claim online then for verification purpose the OTP will come on your Register Mobile number which will be registered with your Aadhar. If your mobile number is not linked with Aadhar then you won’t be able to claim your PF.
However, Yes, you now also have the option to withdraw from your EPF corpus. However, since the money you contributed to your EPF account is some kind of forced savings, withdrawing your EPF corpus should be your last resort. So consider and exhaust all other options before withdrawing from your EPF account. This is also because interest on EPF contributions is currently exempt from tax up to certain limits and financial planners therefore consider it one of the better options for debt investment.
In general, this package provides relief to eligible employees regarding their retirement benefits