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The corporate sector provides employment to a number of people. It is understood as a busy form of life, where you barely have time to breathe. To survive in such a competitive setting, you need to invest your heart and soul. Apart from this, as part of a corporate setting, there are certain things that you need to know for your survival. One such thing is the Employees Provident Fund or EPF. EPF was introduced as a part of Employees' Provident Funds and Miscellaneous Provisions Act, 1952. EPF is managed by the Employees' Provident Fund Organisation (EPFO).
EPF is mandatory for all companies which have 20 or more employees working under it. EPF scheme demands a definite amount to be deposited under the scheme. An equal sum of money needs to be contributed by the employer and the employee. On retirement, the employee gets a huge sum of money. This includes the sum contributed by the employee and the employer, along with accumulated interest. EPF is a modern way of saving for the future. This helps companies secure the future of its employees.
This is an era where everything is taking a digital approach. So is EPFO! EPFO has introduced an online portal to help employees transfer Provident funds from one employer to another. An employee can even withdraw his funds using this online portal. The introduction of the online portal has made it easy for employees to shift their provident fund from one employer to another. This is a critical step that needs to be completed when you switch companies. With the use of this online portal, you can also withdraw your PF balance. However, there are some conditions that need to be met before one can transfer the funds.
An employees' Provident Fund is initiated the moment he steps in the service of any company. The moment an individual is hired by a PF registered organization, he is entitled to PF services. This means that a certain sum of money will be contributed by both the employee and the employer and this money is stored until the employee decides to retire. On retirement, he can claim this sum of money and use it for his retirement plans.
Another possibility can be considered here! It is possible that an employee, may choose to terminate his employment in a company and start a new phase of employment in another company. What happens to the EPF in this case? Career change is not uncommon at all. There are hundreds of people who are constantly shifting jobs. And they can do two things with their accumulated provident fund:
As mentioned earlier, the Employees' Provident Fund is saving for the future. It is something that will help the employee during his retirement phase. Keeping all this in mind, it is best to transfer your EPF instead of withdrawing it.
EPF acts as a safety net for retirement. Along with this, it also helps you save on tax. From a taxation point of view, it is considered best to transfer EPF, instead of withdrawing it. Withdrawal of Employees' Provident Fund within five years of service can lead to taxation.
In case an employee chooses to withdraw his provident fund instead of transferring it, he may be charged with taxes. According to the rules, if the provident fund is less than five years old, and the employee decides to withdraw it, TDS is deducted from the PF amount.
Instead of withdrawing, if the employee decides to transfer his PF from employer to employer and maintain the PF for a minimum period of 5 years, then his PF shall be tax-free. It simply means that post five years, whenever he decides to withdraw his PF, he will be eligible for tax-free withdrawal.
Your savings would grow on the basis of compound interest. And we all know that compound interest is so much better than simple interest. Keeping this in mind, if you choose to withdraw your PF and start a new one, you will be losing a lot. If you decide to transfer your PF while switching companies, you will continue receiving compound interest. Whereas, when you withdraw an existing Provident Fund and start a new one, you will receive smaller interests. This is a loss in itself.
According to the law, if an employee continues his EPF account for more than ten years, he automatically becomes eligible for a pension. This means that if an employee manages to continue his provident fund for more than ten years, he will be paid pension after 58 years of age. This benefit is not applicable if he closes and opens a provident fund each time he switches a job.
So, it can be understood here that provident funds, when transferred, yield better benefits. On transferring, you get more interest and eventually become eligible for a pension. More interest and pension give you bigger benefits. This also ensures that you don’t have to face any sort of financial difficulty in your old age.
With an Online portal in play, it has become a piece of cake for employees to transfer their EPF from one company to another. An employee can shift their Employees’ Provident Fund simply by putting a few details on the online portal.
Following are the steps which you need to follow in order to transfer your EPF online:
The first step is to log into your EPF account. You can easily log into that portal using your UAN and password.
When you log into your account, you will see a “Transfer Request” option. This option is available under the section of "Online Services." Just visit the "Transfer Request" option and continue with what comes next.
The following section would ask you to put in your EPF details. Simply put in all the details regarding your EPF account. In other words, you need to mention your Member ID provided by your previous employer.
After this, an employee needs to submit the transfer request for getting it attested. You need to get it attested by either your previous or current employer.
Carefully mention your member ID and UAN in appropriate fields.
Post this step, you need to generate a MID. You can do this by clicking on the option which says, "Get MID."
Once you have generated your MID, you need to enter it into the section provided. Then, click on the "Get OTP" option. This will send the OTP to your registered mobile number.
Click on the “Submit” button after entering the OTP sent to your registered mobile number.
Now, you need to submit a copy of your online PF transfer request, which needs to be self-attested. The online PF transfer request needs to be in PDF format. You need to submit it to your employer within ten days of initiating a transfer request.
The employer needs to approve the PF request and send it back to you in a digital format.
Once it is approved, the PF is transferred to your new employer.
This portal also helps you create a tracking ID for your application. That way, you can keep a check on your application and keep up with every step.
After this, a Transfer Claim Form (Form 13) is generated which you need to download. In some cases, an employee needs to submit this form to the current employer in order to get his EPF transferred.
What do you need to transfer EPF online?
While shifting from one company to another, you need to shift your EPF from one employer to another as well. This has many benefits and should be done properly. You need to meet the following requirements before you start transferring your EPF online:
The employee should have an active UAN on the EPF portal. UAN allows you to track your Employees' Provident Fund while shifting your employment from one employer to another. When an employee switches companies, he is provided with a Member’s ID. UAN will connect all these Member ID’s and show them as one account. In this case, having a UAN helps an employee to transfer his provident fund without any difficulty.
Another important thing that an employee needs while transferring his EPF is his bank details. Bank detail, including the account number and the IFSC code, is needed for transferring EPF online. It should be noted that the account number and the IFSC codes should be verified by the employer before initiating a transfer request.
Your Aadhaar number should be linked with your UAN account.
It is pertinent to mention the Date of Joining (DoJ) and the Date of Exit (DoE) while transferring your EPF from your former employer to your present employer.
An employee should also mention his reason for exit on the online portal.
It should be kept in mind that only one transfer request is allowed for one member ID, according to EPFO.
If an employee has multiple EPF accounts, he can unite all his accounts. He can do this by selecting the option "One Employee- One EPF Account."
These are certain things that should be taken care of while transferring EPF online. Having these things in hand, prior to making the transfer makes it all the more convenient for the employee. Switching jobs is a tough phase. This doesn’t mean that transferring your EPF should also be tough.
How can I transfer the PF amount from the previous employer to a current employer?
When an employee switches jobs, he needs to transfer his EPF as well. The online portal created by EPFO allows employees to transfer the Employee Provident Fund from one employer to another. All you need to do is log into the EPF transfer portal and put in relevant details. There are certain things that you need to prepare before you initiate the process of PF transfer. UAN and Bank details are the most important things that you need during the process of PF transfer.
How can I transfer my PF from one company to another?
For transferring your Provident Fund from one company to another, you don't need to do much. EPFO has also been influenced by modern-day technology and has created an online portal that helps employees transfer their Employees' Provident Fund. You need to log into the website using your UAN. Once logged in, you need to find the option which reads "Transfer Request." This is the first step in transferring your PF from one company to another.
You need to be prepared with your UAN and Bank Details. The bank account details should be accurate and you should have your IFSC code.
You might also need to send over your transfer request to your previous employer for attestation.
How can I transfer my PF if I change jobs?
Changing jobs is more of a necessity as people are looking for more and more from their jobs. And until they find what they are looking for, their hunt won’t stop.
Changing jobs comes with responsibilities. Transferring Provident Funds comes with a lot of benefits. Therefore, it is best to transfer PF instead of withdrawing them.
An employee can just log into the online portal created by EPFO and follow the instructions given on the website. Step by step, you will complete the entire process of transferring your Employees' Provident Fund.
What happens if PF is not transferred?
If you fail to transfer your EPF from one employer to another, the previous employer denies to put in money into the provident fund. This leads to your Provident Fund becoming dormant and a dormant account does not get any interest.
If you transfer your EPF from one company to another, you will continue to get compound interest on your initial sum. But if you fail to transfer EPF, your provident fund will fail to gather any interest.
How long does it take to transfer PF from one company to another?
A request to transfer Provident Funds from one company to another takes over 20 days. But the introduction of the online portal has definitely made a positive impact. It takes a lot less time when done online. Therefore, it is best to transfer your EPF online. Within no time, you will be getting continued interest in your previous Provident Fund. Less delay would mean more interest. This makes it easy to settle in the new company.