Employees' Provident Fund Organization, or EPFO, the nodal agency that monitors employees' provident fund (EPF) contributions, now allows the subscriber to make a partial withdrawal, or 'advance' withdrawal, from the PF corpus due to the coronavirus pandemic. According to a new EPF rule, subscribers can withdraw 75 percent of balance or three months' wages, whichever is lower, as non-refundable advance from their account.

Live TV

Loading...

The new rule has been notified in view of the ongoing outbreak of the coronavirus pandemic and the subsequent lockdown to counter its spread. Additionally, the finance ministry recently said that the EPF share of employee’s contribution of 12 percent plus 12 percent of the employer’s contribution will be paid by the government for the next 3 months, in case of small firms.

In order to apply for EPF withdrawal online, the subscriber must have an active Universal Account Number (UAN) and the mobile number used for activating the UAN number should be in working condition. The UAN should be Know Your Customer (KYC)-verified by furnishing information such as Aadhaar, Permanent Account Number (PAN) and bank details.

The subscribers can put a claim for 'advance' withdrawal via EPFO's unified portal -- unifiedportal-mem.epfindia.gov.in. The claim is then forwarded to the employer for approval. Once approved, the amount is credited to the subscriber's account.

Here are the steps to initiate a EPF claim online citing coronavirus pandemic as the reason:

Step 1: Login to the EPFO portal - unifiedportal-mem.epfindia.gov.in using UAN and password

Step 2: Go to 'online services' and select 'claim' section

Step 3: Verify the bank account number

Step 4: Upload a scanned copy of a cheque or the passbook

Step 5: You will be asked a reason for submitting the advance. Select 'outbreak of pandemic' as the reason

Step 6: Generate an Aadhaar-based OTP. Once the claim is processed, it will be forwarded to the employer for approval.

Previously, non refundable advances were permitted only for specified purposes such as purchase/construction of the house, repayment of a loan, non-receipt of the wage for two months, marriage of self/daughter/son/brother, for medical treatment of family members etc.

Financial experts, meanwhile, say that it is not a good idea to withdraw the PF amount until retirement. EPF works on compounding and the corpus, if allowed to build up, can reap huge benefits. However, subscribers may do so in order to meet their short-term needs or in an unforeseen situation like the present.

Catch all coronavirus updates live here