Amidst the Coronavirus crisis, the Employees’ Provident Fund of India has allowed the withdrawals of funds from the EPF accounts if any financial difficulties arise due to the lockdown. An EPF member is allowed to withdraw up to three month’s basic salary and dearness allowance or 75% of the account’s balance, whichever is lesser.
Since this will be considered an advance, these withdrawals will have no tax implications for subscribers. Additionally, to ease the process, EPFO has allowed online withdrawals by the subscribers. However, it is important that the Universal Account Number (UAN) is active, the Aadhaar is verified and linked with the UAN. Additionally, the member’s bank account along with the IFSC code should be seeded with the EPF account. It must be noted that the withdrawal for all KYC complaints will be processed within 72 hours of applying.
Even though the withdrawal process has been made quite easy in order to provide financial assistance to the members during the lockdown, experts suggest that one must decide to withdraw the balance only in case of emergencies. Since, EPF is considered as a saving instrument for the purpose of retirement, withdrawing the balance from it will deprive your retirement kitty from the power of compounding. Moreover, the withdrawals made from EPF accounts are non-refundable, which means that this amount cannot be invested back.