Whereas switching jobs individuals generally overlook to switch their PF accounts. They depart it as it’s and open a brand new account with the brand new employer. This ends in creation of a number of accounts for a similar particular person.
It is a mistake which a whole lot of salaried staff do once they change jobs. However, what most individuals dont know is that in the event that they do that – the cash of their account with the earlier employer might get taxable.
It is because the legislation says that this quantity can be exempt from tax provided that the worker has spent 5 years of steady service with the identical employer.
The legislation additionally says that if the worker adjustments his job and transfers his PF Account from the previous employer to the brand new employer, then the interval labored with the earlier employer/employers can be included in computing the interval of steady service.
Thus, as acknowledged above, the interval of spent with the earlier employer would solely be included provided that the PF Account can be transferred. In case the PF Quantity shouldn’t be transferred, the interval spent with the earlier employer wouldn’t be included.
Because the interval spent with the earlier employer wouldn’t be included, it can get taxable as defined within the infographic beneath
Subsequently, if the interval of employment within the earlier organisation is lower than 5 years and you don’t switch the account to the brand new employer, then the quantity acquired from the earlier employer together with the curiosity earned will turn out to be taxable on withdrawal.
To know extra in regards to the Taxability of PF, you could refer this text – Tax on PF Withdrawl (Defined with Charts)
switch your PF on-line from previous employer to present employer?
The latest adjustments in EPFO has made it very easy to switch PF accounts. Now, the employer is assigned a novel UAN quantity. With this UAN quantity all his earlier accounts can be merged and simply with this quantity the PF may be linked with the brand new employer.
The PF account may be transferred from the previous employer to the present employer on-line provided that your Aadhar is linked along with your PF account. As soon as your Aadhar is linked with the PF account, by following the given beneath steps, you possibly can simply switch your PF account.
Steps to switch PF account on-line
Step 1: Get the UAN quantity allotted to your PF account out of your earlier employer.
Step 2: Go to the EPFO web site to create your UAN primarily based login ID.
Step 3: Now, enter your UAN, cell quantity and particulars of present employer like state, institution quantity and account quantity.
Step 4: Test the eligibility for switch on the EPFO website. Fill within the particulars of employer’s location and search by title or institution quantity from a dropdown menu.
Step 5: Click on on Test Eligibility.
Step 6: In case your account is eligible, then you possibly can register on the EPFO web site.
Step 7: It’s important to submit a legitimate picture ID corresponding to PAN card, Aadhaar or Driving Licence. Confirm your cell quantity with the OTP.
Step 8: After receiving a affirmation message. Proceed additional.
Step 9: Go to the EPFO Member Claims Portal, and login with the doc ID and telephone quantity.
Step 10: Within the tabs and click on on Request for switch of account.
Step 11: Fill in PF switch kind.
- Enter private info corresponding to Title, E-mail, IFSC code of the financial institution and the wage account quantity.
- Enter your previous PF account
- Enter present PF account.
Step 12: Preview to verify if the data is appropriate.
Step 13: Enter the captcha code for verification and you’ll obtain a PIN. Click on “I Agree”.
Step 14: Enter the PIN to provoke the declare switch.
Alternatively you may also comply with the given beneath course of,
Step 1: Replenish the Composite Declaration Kind (F-11), rather than Kind 11, with the main points of your previous PF account and the Common Account Quantity (UAN).
Step 2: Submit it to the brand new employer.
Step 3: The brand new employer will furnish these particulars on the employer’s portal at EPFO.
Step 3: If UAN is linked with Aadhaar and the earlier employer has verified it, then the portal will set off the auto-transfer course of.
Step 4: An SMS can be despatched confirming the beginning of auto-transfer course of.
Step 5: As soon as the primary instalment of worker PF is deposited by the brand new employer and reconciled, the auto switch can be processed. A message can be despatched to the worker for completion of switch of previous EPF accumulation to the brand new EPF account.
The time interval taken to switch the PF account is round 20 days. It could possibly enhance or lower relying on the time taken by the earlier employer to attest the previous declare.
Now that you know the way essential it’s to switch your PF account to your new employer, we hope that you’ll take the required steps to get it executed to save lots of your hard-earned cash.