Employees can withdraw a sum of money from their FP accounts and use the withdrawn money as a personal loan. Although the name may mean that it is a loan, it is not like the typical personal loan where the person has to repay the amount to the bank. With a PF loan, the repayment procedure is not included as it is non-refundable. The employer`s provident fund organization, or EPFO, oversees this process and allows an employee to withdraw money only after the reason has been verified and justified. Typically, an employee who has been on duty for 5 years or more is granted a loan from their FP account. This condition may change depending on the reason for the FP loan application. Since Miss Kavita`s AD and base salary sum is less than 75% of her PF account balance, she can withdraw INR 75,000 as a COVID-19 emergency advance loan. Buy land: If you want to buy land, you can withdraw money from your PF account as an PF loan. You can check the following conditions to learn more about renovating or building a home: Owning a home is a dream for many people.
If you want to renovate your old home or build a new one, you can take out a PF loan. Check the requirements Here are the documents required for a PF loan: It is easy to calculate the amount of the loan that will be sanctioned to you. We will explain it with an example. Suppose Miss Kavita applied for a COVID-19 emergency advance loan. She has a balance of INR 2.5 lakhs in her PF account. Now the sum of their monthly base salary and DA is 25000. So the total amount for three months would be 75000. If we charge 75% of 2.5 lakh INR, this is 187500 INR If you want to take advantage of the EPF COVID-19 emergency advance, you will need to fill out the online application form. Make sure your UAN is validated with your Aadhar card and the KYC of your bank account. You will also need to link your mobile phone number to your UAN to ensure the completion of the withdrawal process. Education: If your child has secured a place at a university or college, you can withdraw money from your FP account to contribute to the cause.
Check the following conditions, if you want to take out a loan for educational purposes Although FP loans do not have an interest rate, you will have to pay certain fees. These costs are calculated in relation to the amount that would have accumulated as an interest rate on the amount withdrawn if you had not subscribed to it. The interest charged on EPF deposits is 8.5%. This rate is based on the monthly current account balance. As mentioned above, EPFO will only approve a loan from your PF account if your reason for applying for it is justified. This process ensures that employees do not take advantage of an FP loan and often withdraw small amounts. Saving in a PF account leads to an employee`s financial stability even after retirement. Thus, frequent cash withdrawal is not encouraged while the employee is still on duty. If you want to apply for a PF loan, you can check below some of the reasons why such a loan is usually granted: Apart from the above, one can also apply for an FP loan in the event of a natural disaster. The coronavirus pandemic has wreaked havoc around the world, resulting in the loss of millions of lives. With the lockdowns imposed, many people have also lost their sources of income.
In order to help affected employees in these turbulent times, EPFO has included a special provision in the ETH Act. Under this provision, an affected person may withdraw a non-refundable COVID-19 emergency advance from their FP account. To check the status of your EPF Advance application, follow these steps: Unemployment: Those who have been unemployed for a month can withdraw up to 75% from their PF accounts. If a person has been unemployed for 2 months or more, they can withdraw the entire contribution from their PF account. Employee Provident Fund or EPF is an employee pension scheme approved by the Government of India. Under this program, a small amount of money is deposited into their Provident Fund (FP) accounts by employees of eligible organizations from their monthly base salary. Once you meet the above requirements, you will no longer need your former employer`s certificate. You can even use the unified mobile app for New-Age governance or the UMANG app to take advantage of the COVID-19 emergency advance. Wedding: In India, a wedding is usually not a one-day event.
It extends over several days. Therefore, a lot of money is spent on celebrations. So, if you want to withdraw money for this reason, some of the conditions that should be met are listed: Illness: To withdraw money for medical purposes, you must meet the following conditions: Company lockout: If an employee no longer receives his salary in the event of a lockout, he can withdraw money from his PF account after fulfilling the following conditions: . . .
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