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Are you considering withdrawal from EPF?

Read further to understand the withdrawal limit, tax consequences and likely impact on retirement corpus.

1. Can I withdraw money from my EPF Account now?

Yes. If you are facing financial problems due to the COVID-19 lock-down

2. How much can I withdraw?

  • 3 months Basic Salary +DA or 75% of credit balance in EPF whichever is lower.
  • No tax implication to subscribers on withdrawals.

3. Should I reinvest the amount withdrawn post lock-down?

COVID-19 Relief: Withdrawal from EPF - All you need to know

Amount withdrawn due to the pandemic outbreak is 'non- refundable'. Hence, you are not required to refund the withdrawn amount back into your EPF.

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4. Is it a wise decision to withdraw from EPF Now?

  • EPF is a long term saving. Withdrawing will deprive power of compounding. EPF offers the highest tax-free return compared to all other fixed-income instruments.
  • Even a small withdrawal midway can impact the retirement corpus drastically.
  • Assuming EPF continues to give ROI 8.5%, your impact on retirement corpus :
 

Amount Withdrawn now in Rs.

No. of years to retire

Retirement corpus will reduce by Rs.

2,00,000

30

23,11,650

2,00,000

20

10,22,409

2,00,000

10

4,52,197

 
 

Choose to withdraw EPF only if all options are exhausted!


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Category Taxpayers, Other Articles by - CA Unnamalai L 



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