In order to provide relief to people facing a cash crisis due to loss of earnings aggravated by the Covid-19 blockade, the government has allowed salaried employees to make use of a non-refundable advance on the Fund’s accounts. Employee Welfare Plan (EPF). A member can withdraw up to 75% of the outstanding balance in their EPF account or three months of basic payment plus the allocation of expenses, whichever is less. The outstanding amount includes the employee’s share, the employer’s share and the interest. A member can take advantage of this while still in service.
The trailer is available only once and will be available until the pandemic prevails. The EPFO has clarified that during the processing of any other advance, the application of the Covid-19 claim is allowed. A member can request such claims online if their Universal Account Number (UAN) is validated with Aadhaar and KYC from the bank account and the mobile phone number is seeded in UAN.
While in the FAQ section on the EPFO website, EPFO says it is settling claims in advance within three business days, a member must ensure that the online submission process is carefully followed to avoid delays in getting the money.
However, a person should think twice before withdrawing money from the EPF account, as it helps build a long-term retirement corpus and is tax efficient. Investments earn a ‘1.5 lakh tax exemption under Section 80C of the Income Tax Law, interest earned is tax-free, and the final retirement after retirement is also tax-free. The retirement fund body has decided to provide an interest rate of 8.5% on EPF deposits for 2019-20, one of the highest of all fixed income instruments.
Ideally, if you have funds in term deposits, you should withdraw them since interest rates are decreasing. For example, the State Bank of India offers an interest rate of 5.5% for deposits of one to three years and 5.7% for deposits of more than three years. So with a 20% tax range, subsequent tax returns will be 4.36% and 4.52%, respectively.
How to take advantage of the non-refundable advance
A member can file an advance claim online for Covid-19 on the EPFO Unified Portal member interface (https://unifiedportal-mem.epfindia.gov.in/memberinterface) and then go to the service claim at line (Form-31, 19,10C and 10D). For faster claims, it is mandatory to upload a verification sheet that contains the member’s printed name, or the first page of the bank book or bank statement that contains the name, account number and IFSC. This is necessary to ensure that the bank account number loaded into the KYC is correct and erroneous payments are avoided.
A member can file the claim via mobile phone by downloading the UMANG (Unified Mobile Application for New Age Government) application. You can log in with your UAN and OTP received at the mobile phone number registered with UAN to file a claim.
An employee of an exempt establishment may withdraw from their PF account maintained with the establishment’s PF trust. According to the EPFO control panel, 11,25,666 Covid-19 claims were resolved through May 12.
Details don’t match
The member must ensure that the UAN is activated, Aadhaar verified is linked with the UAN and the bank account with the IFSC code is seeded with the UAN. If a member’s Covid claim has been rejected due to a discrepancy of details, you can update the details by logging into the member’s e-sewa portal and submitting the claim once again.
If a member has two different UANs, they must transfer all previous services to the last member ID. This can be done by filing a transfer claim. Once successfully transferred, the entire PF corpus will be reflected in the last member ID and then you can file a Covid Advance Claim for maximum benefit.
After processing the claims, EPFO sends a check to the bank to credit the amount to the claimant’s account. It usually takes one to three business days for the bank to credit the advance to the member’s bank account. Therefore, when applying for the claim online, make sure the scanned documents are clear and the proper documents are uploaded. Make sure the UAN-linked bank account is not inactive. However, any changes to KYC details must be made by the employer.