Now the transfer of PF Account can be done online as well as physically by submitting Form 13 to the current or previous employer. The transfer of pf account required to have a UAN or Universal Account Number.
A social security scheme launched by the government in favor of salaried class employees in the form of Employee's Provident Fund and Miscellaneous Provisions act 1952. Employee Provident Fund is being managed by EPFO and controlled by Ministry of Labour and Employment, Government of India. The amount accumulated with the contribution of employer and employee is meant to assist the employees in their old age after retirement. The current interest rate for PF Account is 8.65%. The scheme is not only tax saving but meant to provide stability and security to the employee and his or her family as well. Registered employees can also withdraw partially on some special occasions.
Important Facts About EPF:
The contribution is mandatory for the employees earning Rs. 15000/- basic per month. The total contribution of Employer will be 13.61% of Employees Basic salary and the employee's contribution is 12% of basic salary.
Basically, the PF Scheme has been segregated with three headings and the contribution is being made accordingly. The three parts are:
- EPF - Employees Provident Fund
- EPS - Employees Pension Scheme
- EDLI - Employee Linked Deposit Scheme
Under EPF, employees 12% contribution goes directly to EPF scheme. Out of 13.61% employer’s contribution, 3.67% goes to EPF and 1.1% goes towards EPF administrative charges. A partial amount from EPF can be withdrawn in case of:
- Purchase of House
- Construction of House
- Education and Marriage Expenses
- Medical Treatment
- Repayment of Home Loan
- Repairs and Renovation of Home
Here, 8.33% of employer contribution (out of 13.61%) goes towards EPS. The contributed amount can be withdrawn after retirement. Employee contribution is nil here.
The scheme provides insurance benefits to the insured employees. Under this scheme, the nominated relative of insured employees is entitled to receive a lump sum payment in case of employees death due to natural causes, accidents or illness. Out of total 13.61% employers contribution, 0.5% goes towards EDLI and 0.01% is for EDLI administration charges.
How does PF Account work?
If the employee changes his or her job, then PF account can be transferred to the new employer of the amount accumulated can be withdrawn completely. But, if the withdrawal is before a continuous service of five years, then the amount is taxable. On the other hand, if the withdrawal will be after 5 years, there will be no tax on earned income as well as on interest.
If the funds transferred from a recognized PF account to the NPS (National Pension System), there will be no tax deducted. No have Account? Register PF account Online here.
Withdrawal of PF amount:
PF withdrawal claim can be done by submitting the forms:
Form 19 -
Form 19 is meant to claim for the PF amount accumulated in the employee's account.This can be directly submitted to the EPFO without employers signature if the account is linked with Aadhaar and bank account details.
You just have to fill the form properly and submit the same to the authority.
Form 10c - This form is required to submit for Pension amount withdrawal. By submitting this form, an employee can withdraw the amount contributed by the employer towards pension scheme.