If you are an employee, you would know about the employee provident fund, which is a great retirement savings plan for you to opt for in the case of your employer contributing along with you. But if you are switching from one job to another, wouldn’t you want to know what to do with your EPF account? That is exactly why you need this post. Here is everything that you need to know.
What is the Employee Provident Fund?
A non-constitutional organization called the Employees’ Provident Fund Organization (EPFO) encourages workers to save aside money for their retirement. The organization was established in 1951 and is overseen by the Ministry of Labor and Employment, Government of India.
Indian laborers and foreign workers are covered under the organization’s programs (from countries with whom the EPFO has signed bilateral agreements).
Is EPF Different from PPF?
Here are the elements that make these two schemes different from each other:
- EPF investments earn an interest rate of 8.1%, compared to a PPF account’s interest rate of 7.1%.
- When you quit your work, you can take the funds from your EPF account. However, the PPF deposit cannot be withdrawn until the account reaches maturity, which takes 15 years from the deposit date.
- While an individual can withdraw funds from an EPF account to cover personal needs, a loan can be obtained against PPF accounts.
- While investments made in an EPF account are eligible for a tax deduction under Section 80C of the Indian Income Tax Act, 1961, returns received through a PPF account are not subject to taxation.
- Only those who are employed can access an EPF account. However, anyone can register a PPF account.
Can You Transfer the EPF Account from One Employer to Another?
Yes, You can!
Here is how you get it done – the step-by-step guide to the EPF Transfer Process:
Employees must adhere to the instructions below in order to create an online transfer request:
1st Step: Use your UAN and password to access your EPF account here.
2nd Step: In the Online Services section, you will have to select “One Member – One EPF Account (Transfer Request).”
3rd Step: Verify personal information and the specifics of the current PF account with care.
4th Step: To obtain the PF account information for the prior employer, click on “Get Details.”
5th Step: Depending on the availability of an authorized signatory holding a DSC, choose either your current employer or your prior employer to certify the claim form. Select a company and enter your Member ID or UAN in the appropriate fields.
6th Step: To obtain the OTP to your registered mobile number, click the “Get OTP” button. To verify your identity, enter the OTP in the box provided and press the “Submit” button.
7th Step: The next step is the generation of an online PF transfer request form, which must be self-attested and delivered in PDF format to your chosen company. An online notification about the EPF transfer request will also be sent to the employer.
8th Step: The PF transfer request is then digitally approved by the employer. The PF is moved to the new account with the present employer as soon as authorization is given. Additionally, a tracking ID that can be used to trace the application online is generated.
Still, Have an Issue? Get it Resolved
There have been cases where some employers have refused to permit workers to access their PF savings in an emergency. Employee harassment instances have multiplied over the years to the point where the EPFO has now established a “claim portal” where workers can resolve their disputes with their employers.
Employees who experience such issues should follow these procedures to file a claim and a complaint against their employer:
- Visit the EPFO’s claims site at https://employerclaims.epfoservices.in/ to register a claim.
- Once there, select EPFO “claim online” to begin. A claim may be made by any PF account holder who is having problems with their employer.
- The PF holder can submit a “complaint about provident fund” on the same portal if the employer refuses to let you make an emergency withdrawal.
- If the concern is legitimate, the EPFO will address it and resolve it as soon as possible.
- If an employer violates specific rules regarding PF withdrawals, the employee cannot make a complaint against the company. In these circumstances, their claim will be rejected. These are the limitations:
Before making a withdrawal, he or she should have worked for the current company for at least two months. An employer has the right to deny a request for a withdrawal if the employee made one before the two-month mark.
No matter how urgent the circumstance, an employee cannot withdraw their entire salary before turning 57. If the applicant is under 57 years old, up to 90% of the payment may be made.
Owners of PF accounts need to be aware that withdrawals made before five years of continuous service are subject to tax. Withdrawals made after five years are tax-free.
Some Things That You Can’t Just Forget
Before submitting a PF transfer application, workers must make sure that their-
- On the portal, UAN is operational.
- Active mobile number registered.
- UAN and a bank account are connected.
- KYC is cross-checked with UAN.
- Both the present and former employers have authorized digital signatures registered.
- The EPFO database stores the PF numbers for both present and past employment.
There is so much more that you would have to know about the EPF – and it only helps on every step of your career and financial stability.