In view of the difficulties faced by many salaried people due to lockdown, the government has made a special provision to withdraw deposits in EPF. The department has so far settled 1.37 lakh claims since the announcement by Employees' Provident Fund organization (EPFO). Now in such a situation, there will be a question in the mind of many whether due to Kovid-19, tax will have to be paid on withdrawal of PF. So the answer is - no. Normally, tax has to be paid for withdrawing funds from PF account without continuous service for five years. However, in medical emergency and some other cases, PF account holder gets tax exemption.
According to the media report, if you decide to withdraw PF due to the Kovid-19 epidemic, then you will get exemption from tax. This means that even after five years of service, you will not need to pay tax.
In the present situation, EPFO has started an auto-process system for those filing claims on Kovid-19. Under this, the claim filed for evacuation by citing Kovid-19 as a reason is being disposed of within 72 hours i.e. just three working days. Accordingly, according to the notification issued by EPFO, you can withdraw 75 percent of the amount deposited in your PF account or three months salary (basic salary and dearness allowance), which is less. This means that if you have four lakh rupees deposited in your PF account. Your basic salary and dearness allowance is Rs 40,000 monthly. In this way, the basic salary and dearness allowance for three months was 1.20 lakh rupees, while 75 percent PF amount means three lakh rupees. In this case, you can withdraw up to Rs 1.20 lakh.
Also Read:
Here's how India's economic growth rate will be in the financial year 2020-21
Financial assistance received under the Prime Minister's Poor Welfare Package
Government preparing to open 20 lakh 'security stores' amid lockdown
People’s Bank of China picks up 1.75 crore shares in HDFC