Loan On PF303 views
- Facing salary cuts or have lost your job due to the COVID-19-induced disruptions? EPFO is here to help you!
- You can withdraw as much as 75% of your PF balance and deal with this crisis
The COVID-19 pandemic is tearing into the economy of India due to the prolonged lockdown that has shut down offices and factories across the country. The shutdown of such establishments has brought unprecedented challenges for the salaried class who are either witnessing pay cuts or losing jobs. All this has made their day-to-day life nothing short of war. While the retirement body Employees’ Provident Fund Organisation (EPFO) allows jobless to withdraw from their EPF account, it didn’t have any provision for withdrawal by individuals facing salary cuts before. As per the latest rule, any EPF member can withdraw if the concerned faces economic pressure due to the pandemic. The key, however, is the extent up to which you can withdraw from your PF account. This post will tell you the same while also showing the steps by which you can get money from your provident fund.
Table of Contents
How Much Can You Withdraw from Your EPF Account?
The EPFO has allowed withdrawal upto 75% of the PF balance or basic salary and dearness allowance of 3 months, whichever is lower. The PF balance is a sum of employee and employer contributions as well as their respective interest on the same. 12% of the basic salary and dearness allowance is deducted twice by the employer from your monthly income. Deductions go down as employer and employee contribution to the provident fund. Contributions fetch you interest at a rate decided by the government. Presently, the interest rate on EPF balance stands at 8.50% per annum.
What is the Process by Which You Can Withdraw from Your PF Account?
The process is simple to understand.
- Login to the Unified Member Portal using your Universal Account Number (UAN) and password
- Go to ‘Online Services’
- Click on Claim Form 31
- Indicate the purpose of COVID-19 Pandemic
- Enter the amount you need and mention your address
- Upload the scanned copy of a cheque
- Click on ‘Get Aadhaar OTP’
- An OTP will come to your mobile number
- Enter the OTP
Doing all this will ensure your claim gets submitted to the EPFO. The money will be into your bank account after the EPFO finds the details genuine. As opposed to withdrawals for purposes like marriage, education, medical treatment, home purchases wherein you are required to attach valid certificates, there’s no such requirement when you are withdrawing funds from your EPF account to deal with the economical challenges presented by the COVID-19 pandemic.
What to Do After the Lockdown is Over and Things Get Back to Normal?
You should know that the provident fund contribution has a certain purpose i.e. to build your retirement corpus. The withdrawal from the EPF can decrease the surplus. But EPFO allows voluntary contributions from employees beyond 12% of their basic salary and dearness allowance. The maximum voluntary contribution allowed is upto 100% of such salary constituents. You can interest in such contributions at the same rate. So, as the lockdown gets over and you start receiving the full salary, ensure you save from your daily routine and put something from your end voluntarily. This will not only help you cover up the withdrawal amount but also ensure you retire with more.