How To Withdraw Your PF Using The Pandemic Option?

How to Withdraw PF? How it can help me? The 1952 EPF Scheme has provisions for participants to get advances if the government declares a calamity or epidemic. Employees will be able to take care of crucial financial concerns with the aid of the advance during the lockdown.Employee Provident Fund (EPF) donations to non-profits have decreased from 12% to 10% in recent years. The interest rate on EPF contributions will be 8.5% for the fiscal year 2020-21. This article will discuss all the details of the EPF withdrawal.

Who can withdraw funds from their EPF account?

Any employee contributing to the EPF may apply for a loan using their EPF balance as collateral. To complete a withdrawal, the employee must have their Aadhaar card, Permanent Account Number (PAN), and bank account, as well as their EPFO-issued Universal Account Number (UAN).  If you fulfil all the criteria then you will be eligible for EPF withdrawal

How much money you can withdraw from your EPF account?

You may borrow up to 75% of your existing EPF balance as a loan, equivalent to three months’ pay plus the dearness allowance. Because the employee cannot get the funds, they are not required to withdraw PF from their EPF account. This withdrawal will provide staff with the funds they need while COVID-19 is closed. To apply for a loan via the EPFO, employees must visit the organisation’s website and sign in using their normal login credentials.

How to withdraw PF?

Anyone who works for a firm that the pandemic or epidemic has harmed may request authorisation from the Commissioner to withdraw PF. There are two options for getting your money back:

• submitting a paper application to be reviewed
• Filling up and submitting an online application

Applying over the Internet

Online procedures for withdrawal of PF are as follows:

• EPFO members must utilise their UANs anytime they use the organisation’s online services (Universal Account Number).
• Select “Claim (Form-31, 19 and 10C)” from the drop-down menu that appears after choosing “Online Services.”
• The member’s details and the “last four digits of their bank account number” are shown on the next page.
• After confirming the member’s identification, they may submit their claim by choosing “Proceed for Online Claim.”
• The participant must complete a “PF Advance (Form 31)” application.
• The cause for the modification should be noted as a “pandemic (COVID-19) outbreak.”
• To acquire an advance, a member must provide their address, specify how much they want, and scan a copy of a bank check.
• You may get an OTP connected to your Aadhaar by requesting one.
• A one-time password (OTP) has been sent to the phone number you provided (with Aadhaar authorities)
• The form must be submitted as soon as feasible.

The paper-based application

People who have connected their bank account and Aadhaar number to their UAN may file a claim with the EPFO using the new composite claim form at their regional EPFO office (Aadhaar). The Aadhaar-based form does not need the employer’s signature but must be self-certified will be more guaranteed for withdrawing PF.

If a worker has not connected their Aadhaar and bank account to their UAN, they must file claims using the new composite claim form (Non-Aadhaar). Both the employee and the employer must sign the paper. The individual’s lawyer must also sign it so that withdrawing PF can be done smoothly.

If the employee wishes for the funds to be deposited into their bank account, they must submit their PAN and a copy of a cancelled check with their application. The money will be deposited into the member’s bank account. The withdrawal of PF may be made as a non-refundable advance beginning March 28, 2020.

Fiscal ramifications

Workers impacted by the COVID-19 lockout may withdraw PF and get an advance they cannot repay. Workers may also utilise their EPF accounts to pay for items that are particularly essential to them.

If a person has worked for the same employer for at least five years and then withdraws PF, they will not be required to pay income tax. The purpose of a cash advance is to provide funds in the event of a pandemic. However, levying a tax or TDS on the withdrawal would render the advance ineffective. This is because the money you withdraw will be taxed, commonly known as TDS.

The EPFO has said unequivocally that workers are not required to pay income tax on any portion of their COVID-19 advance.

The EPF will amend the requirements for withdrawing funds in 2022

The EPF is a savings account into which both the employee and the firm contribute. You can’t withdraw money from your EPF account anytime you wish. Here is a list of the ten most essential regulations to consider while withdrawing PF:

• Unlike a bank account, money in an EPF account cannot be withdrawn while the account holder is still employed. The Employees Provident Fund, or EPF, allows employees to save money for retirement. You will be able to withdraw PF when you reach the age of 65.
• Customers may do EPF withdrawal accounts in the event of an emergency, such as a medical emergency, the need to purchase or construct a house, or the need to attend college. You might not be able to withdraw as much money if you violated the conditions of your agreement in any manner. The account holder may request that a part of their money be withdrawn electronically.
• Even though you may only withdraw money from your EPF account after retirement, you can apply for early retirement at 55. Employees Provident Fund Organization (EPFO) members who are at least 54 years old and have been members for at least one year may withdraw up to 90% of their EPF corpus one year before retirement.
• If a person is threatened with job loss before retirement due to a lockout or layoff, they may withdraw PF.
• To withdraw PF, the subscriber must provide evidence of unemployment.
• The EPFO now allows consumers to withdraw 75% of their EPF funds after just one month of unemployment. Once the employee has found new employment, the remaining 25% may be transferred to the new EPF account.
• An employee could previously get their whole EPF balance after being out of work for two months.
• You may withdraw PF savings without paying taxes if you satisfy certain requirements. Before a worker may get their EPF corpus tax-free, they must have contributed to their EPF account for at least 5 years. If a person does not contribute to their EPF for five years, the whole amount is deemed income and must be reported and taxed accordingly. In this instance, the amount of EPF contributions would be considered income for the fiscal year.
• Taxes are deducted automatically if you pay your EPF withdrawals before the deadline. TDS is not required if the value of the transaction is less than Rs.50,000. The proper TDS rate is 10% if a person provides their PAN. If not, the tax will be increased by 30%. People who believe that none of their income should be taxed may file Form 15H/15G with the Internal Revenue Service.
• Employees no longer need authorisation from their manager before withdrawing funds from their EPF account. As long as the employee’s Aadhaar and UAN have been connected and the employer has provided authorisation, the employee may do this straight from the EPFO. You can check out how far along your EPF withdrawal is on the website.

Conclusion

The country’s working class must contribute to the Employees Provident Fund (EPF). It’s there to assist you if anything horrible occurs, like the Covid 19 epidemic or because you’re growing older. Members may weather the present economic storm with the assistance of their EPF account and other types of assistance until they can get back on their feet. This safety net will keep the group together during a crisis until everyone can recover. This article has discussed all the possible ways of withdrawing PF.

There are also more in-depth, educational articles on Piramal Finance.