No tax implications of coronavirus relief withdrawals from EPF: EPFO
The EPFO is allowing withdrawals from the Provident Fund if subscribers are facing financial difficulties due to the lockdown. An EPF member can withdraw up to three months basic and dearness allowance or 75% of the balance in the account, whichever is lower. These are nonrefundable withdrawals so members are not required to replenish their accounts. If the PF is with an exempted organisation or managed by a private trust, the member will have to contact his employer for the withdrawal.
Since the facility was introduced on 26 March, the EPFO has already processed about 1.4 lakh claims and disbursed roughly Rs 280 crore. The system is processing all applications which are fully KYC compliant within 72 hours, the EPFO said in a statement.
The withdrawal can also be done online. For this, one must have an activated Universal Account Number, the Aadhaar should be verified and linked with the UAN and the bank account with IFSC Code should be seeded with UAN. No other documents are required.
Experts say that though it has become easy to withdraw the EPF corpus, one must do so only if there is a pressing need. Since the EPF contribution is a long-term saving, withdrawing it will deprive your retirement kitty the power of compounding. Also, at 8.5% tax free, the EPF is a far better option than other fixed income investments. Withdraw from it only if you have exhausted all other options.
