With the Covid-19 pandemic causing severe dent in incomes, many are turning to their Employee Provident Fund (EPF) corpus to tide over this period of distress.
Employees have withdrawn Rs 2,368 crore from their EPF accounts over the past one month. Financial experts say you should only touch your EPF money if you are in dire straits.
Employees can withdraw up to three months of basic wages and dearness allowance, or up to 75 per cent of the amount in their EPF account, whichever is less. This money does not have to be refunded.
According to Mumbai-based tax expert Balwant Jain, “Income-tax is not applicable on any advance availed of under the EPF scheme.”
How to withdraw
You need to meet a few preconditions to withdraw online.
Says Prashant Singh, business head, compliance and payroll outsourcing, TeamLease Services: “For online withdrawal of provident fund, an employee needs to make sure of the following: First, his Universal Account Number (UAN) should be activated, and the mobile number used for activating the UAN should be working. Second, the UAN should be linked to your KYC, i.e., Aadhaar, PAN, and the bank details along with the IFSC code.”
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