Covid-19: What will be the tax on withdrawing money from EPF?
You can withdraw 75 percent of the balance in the EPF member account or your basic salary and dearness allowance of three months (whichever is less).
It is non-refundable, that is, do not refund the money withdrawn from the account. If the PF manages the exempted institute or private trust, the member will have to contact their institution to withdraw the money.
This facility has started from 26 March. Since then, the EPFO has settled around 1.4 lakh claims. During this time he has distributed around 280 crores rupees. The EPFO had said in a statement that all applications complying with KYC are being disposed of within 72 hours.
Whether tax has to be paid on the amount withdrawn from the account? The EPFO has clarified that since it is advanced. Therefore, people will not have to pay any tax on the amount withdrawn from the account.
Such amount can also be withdrawn from the account online. For this, Aadhaar should be accompanied by an active universal account number (UAN). Aadhaar must be linked to UNN. At the same time, UAN should be linked to the IFSC code with the bank account. Apart from this, no other document is needed.
Experts say that it has become very easy to withdraw the amount of EPF. However, this should not be done unless it is very necessary. As EPF contribution is long term saving. Therefore, taking it out in the middle does not help in getting interest on interest. With this, the preparation for retirement hangs in the balance. With a tax free interest rate of 8.5 per cent, EPF is a better option than other fixed income investments. Withdraw money from EPF account only when all other options are closed.