The government has notified amendment in EPF scheme rules regarding withdrawal of funds from the EPF account to deal with coronavirus-related financial exigencies. According to the amended rules, a member can withdraw an amount equal to three months of basic salary and dearness allowance (DA) or 75 per cent of the credit balance in the account, whichever is lower for them.
Here’s how to withdraw from your EPF corpus and how much you are allowed to withdraw.
The EPF withdrawal math
Let us say your last drawn basic salary plus DA (if any) per month is Rs 30,000 and the EPF balance in your account is Rs 3 lakh. Then the amount of money you are eligible to withdraw will be lower of:
a) Three months of basic + DA, i.e., Rs 90,000 (Rs 30,000 X 3); or
b) 75 per cent of the EPF balance , i.e., Rs 2,25,000 (75 per cent of Rs 3 lakh)
According to this example, you are eligible to withdraw Rs 90,000 from your EPF account. The amount withdrawn by you due to the outbreak of the pandemic is ‘non-refundable’. Therefore, you are not required to refund or replenish the withdrawn amount back into your EPF account.
Puneet Gupta, Director, People Advisory Services, EY India says, “The notification amending the Provident Fund Scheme allows such advance for any epidemic or pandemic situation declared by appropriate Government and not just COVID-19. It will allow employees to access provident fund in case of any such notified eventuality in a specific state or location in future.”
EPF withdrawal: Step-by-step guide to withdraw money online
Eligibility to apply for withdrawal
To apply for claim online, an EPF account holder should satisfy these three conditions:
a) Universal Account Number (UAN) of the EPF member must be activated
b) Aadhaar number should be verified and linked with UAN
c) Bank account of the EPF member with correct IFSC should be seeded with UAN.
According to the FAQs issued by the Employees’ Provident Fund Organisation (EPFO), no certificate or documents are to be submitted by the member or his/her employer for availing the benefit. However, an individual must keep the scanned copy of cheque ready as this will have to be uploaded while applying for withdrawal from EPF account online. Ensure that the scanned copy is clear and readable.
Update Bank Account Number & IFSC immediately for credit of EPF accumulations under COVID-19 pandemic withdrawal cl… https://t.co/WzJcTPqZ3N
— EPFO (@socialepfo) 1588234297000
The EPFO, via tweet, has also asked its members to ensure that correct bank details are mentioned to avoid failure of EPF credit.
How to apply for withdrawal
Step 1: Visit the Member e-Sewa portal: https://unifiedportal-mem.epfindia.gov.in/memberinterface/
Step 2: Login to your account by entering your UAN, password and captcha code.
Step 3: Go to Online services and select claim (Form -31, 19,10C and 10D)
Step 4: A new webpage will appear on your screen with all your details such as name, date of birth, and last four digits of your Aadhaar number. The webpage will ask you to enter your bank account number. Enter your bank account number in the required space and click on verify. A pop-up will appear on your screen asking you to give a ‘Certificate of undertaking’.
Step 5: Once the bank account number is verified, then click on ‘Proceed for online claim’.
Step 6: From the drop down menu, you will be required to select ‘PF advance (Form 31)’.
Step 7: You will be required to select purpose of withdrawal as ‘Outbreak of pandemic (COVID-19)’ from the drop down menu.
Step 8: Enter the amount required and upload the scanned copy of cheque and enter your address.
Step 9: A one-time password (OTP) will be sent on your mobile number registered with Aadhaar.
Step 10: Enter the OTP received by you via SMS.
Once the OTP is successfully submitted, the claim request will also be submitted. The money will be credited to your bank account only if the details match and your claim is accepted by the EPFO.
Withdrawing via EPFO’s Umang app
Step 1: Login to Umang App
Step 2: Select EPFO
Step 3: Select ‘Employee Centric Services’
Step 4: Select the option ‘Raise Claim’
Step 5: Enter your UAN details and click on ‘Get OTP’ to get one-time password to login in your account.
Step 6: Enter the OTP and click on login. Once you are successfully logged in to your account, enter last four digits of your bank account and select the member ID from the drop down menu. Click on ‘Proceed for claim’.
Step 7: You will be required to enter your address. Click on ‘Next’ once the correct details are entered.
Step 8: Upload the cheque image. Once all the details and required information is entered, then your claim will be filed.
How to check the status of the claim
To check the status of the claim you filed, you can log in to your account on the Member e-Sewa portal. You can check the status by clicking on ‘Track Claim status’ under the ‘online services’ tab.
Things to remember
While applying for withdrawal from EPF account, check whether your organisation is exempted. If your organisation is exempted, then you will have to contact your employer for the withdrawal. Exempted organisations are those that have private trusts to manage the EPF of employees.
As per the FAQs issued by the EPFO, the claim due to coronavirus can be made one time only by the individual. Further, the amount withdrawn is exempted from tax.
Yes, you now have the option to withdrawn from your EPF corpus. However, since the money contributed by you to your EPF account is a type of forced saving, withdrawing from 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 currently, interest on EPF contributions is exempt from tax up to certain limits and consequently financial planners consider it to be among the better debt investment options at present.