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EPF Withdrawal Rules Relaxed Due To COVID-19 Pandemic

3 min read
2 years ago
EPF withdrawal rules relaxed by Government to support liquidity issues due to COVID-19 pandemic. Finance Minister Nirmala Sitharaman has announced economic relief packages, which includes 2 major announcements relating to EPF contribution and EPF withdrawal

Government Relaxed EPF Withdrawal Rules To Support Liquidity Issues Amid Coronavirus Pandemic

Introduction

EPF withdrawal rules relaxed by Government to support liquidity issues due to COVID-19 pandemic. Finance Minister Nirmala Sitharaman has announced economic relief packages, which includes 2 major announcements relating to EPF contribution and EPF withdrawal. Let us know about it in detail.

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EPF Withdrawal Rules Relaxed Due To COVID-19 Pandemic

Government Relaxed EPF Withdrawal Rules To Support Liquidity Issues Amid Coronavirus Pandemic
Government Relaxed EPF Withdrawal Rules To Support Liquidity Issues Amid Coronavirus Pandemic

Payment of EPF Contribution Borne by Government of India

  • According to Employees Provident Fund and Miscellaneous Provisions Act, 1952, Employees should contribute 12% of their salary to Employee Provident Fund and equal contribution is made by their employer in PF account of employees.
  • Considering the economic distress caused due to COVID-19 Pandemic, Finance Minister Nirmala Sitharaman has announced that –
  • Government of India will pay the EPF contribution of both employees (12% of the salary) and employers (12% of the salary) for next 3 months.
Who Can Avail Benefit of the EPF Announcement?
  • Government has set 2 criteria for the payment of EPF contribution
    1. Number of employees in the Establishment shall be less than 100. AND
    2. 90% of employees of such establishment draw salary less than Rs. 15,000.
  • If both the criteria are met, Government of India will bear the burden of EPF Contribution for next 3 months.

Withdrawal from EPF Account

  • In the event of COVID-19 Pandemic, EPFO has amended its rules relating to withdrawal from PF account of the employee.
  • As per the general provisions, premature withdrawals from PF account are permitted only under specific circumstances. However, Finance Minister Nirmala Sitharaman has announced that, all the employees can withdraw up to 75% of the EPF balance. However, this amount shall not exceed the Basic Salary + Dearness Allowance of the 3 months.
  • It means, the maximum withdrawal by an employee from PF account is –
    1. 3 Months’ Basic Salary + Dearness Allowance OR
    2. 75% of PF Balance outstanding in PF Account of an employee
    3. Whichever is Lower
Example
ParticularsReferenceCase ICase II
Balance in EPF AccountARs. 1,00,000Rs. 1,00,000
Monthly Salary + DABRs. 30,000Rs. 20,000
75% of PF BalanceC = 75% x ARs. 75,000Rs. 75,000
3 Months’ (Salary + DA)D = B x 3Rs. 90,000Rs. 60,000
PF Withdrawal allowedE = Lower of C & DRs. 75,000Rs. 60,000
Withdrawal from EPF Account – Example

How to Withdraw from your EPF Account?

  1. Visit Employee Provident Fund Website.
  2. Log in To your EPF Account by entering your UAN and Password
  3. Go to ‘Online Services’
  4. Go to ‘Claims’ Section
  5. Verify your Bank Account Details
  6. Upload a scanned copy of cancelled cheque on the portal
  7. Submit the reason for withdrawal – Select ‘Outbreak of Pandemic’
  8. Generate Aadhar Based OTP
  9. Check the status of your claim. Once your claim is accepted and processed, PF withdrawal amount shall be credited to your bank account.

Frequently Asked Questions (FAQs)

1. Is the premature withdrawals from EPF account due to COVID-19 taxable?

No. The premature withdrawal from EPF account is not taxable.

2. Who is eligible to withdraw under the relaxed EPF withdrawal provision by Government?

Any person who is having an EPF account and has UAN (Universal Account Number) is eligible for advance withdrawal from EPF.

3. What is the maximum withdrawal limit from EPF account?

Up to 3 Months of Basic Salary + Dearness Allowance OR
75% of PF Balance outstanding in EPF Account, whichever is Lower.

4. Are any supporting documents required for the advance EPF withdrawal?

This provision of advance EPF withdrawal given by Government is mainly to address the short-term liquidity or cash-flows issues. So, it doesn’t require any supporting documents.

5. How one can claim for withdrawal from his /her EPF Account amid current lockdown?

You can claim the withdrawal from your EPF account on by visiting Employee Provident Fund Website. It is an online process. The detailed procedure is explained in this article above.

6. Is there any App available for withdrawal from EPF account?

Yes. UMANG is an official app (available on play store) availing various Government services. UMANG (Unified Mobile Application for New-age Governance) provides a single platform for all Indian Citizens to access pan India e-Gov services ranging from Central to Local Government bodies and other citizen centric services.

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Tags: Changes in Tax Related Deadlines Due to COVID-19 Coronavirus Outbreak Coronavirus Pandemic Economic relief measures amid coronavirus Employees Provident Fund EPF EPF Account EPF Contribution EPF withdrawal EPF withdrawal amount EPF Withdrawal Rules EPF Withdrawal Rules Relaxed EPF Withdrawal Rules Relaxed Due To COVID-19 Pandemic EPF Withdrawal Rules Relaxed To Support Liquidity Issues Government Relaxed EPF Withdrawal Rules To Support Liquidity Issues Amid Coronavirus Pandemic How to Withdraw from your EPF Account? Payment of EPF Contribution Withdrawal from EPF Account

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