PF Transfer: Did you not transfer your PF after changing jobs? You may face these 5 big problems
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PF Transfer: Whenever most of us leave one job and join another company, we often forget to transfer our PF (Provident Fund) account or postpone it. But this small negligence can become the reason for many problems in the future. Whether it is the problem of interest being stopped or problems in claiming income tax and funds after retirement.
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Let us know what problems you may face if you have not transferred PF after changing jobs and what is the right solution for it.
There may be loss on EPF interest
According to EPFO rules, if a PF account remains inactive for three years, that is, no contribution is made to it, then interest on it stops. In such a situation, the money lying in the PF account of the old employer can gradually harm your savings.
Financial advisor Sanjay Chaudhary says, “Not transferring PF on changing jobs can stop the compound interest on your money. This can reduce the retirement corpus. In such a situation, it is better to transfer the PF account immediately after changing jobs.”
Tax hassles and the blow of TDS
If an employee’s old PF account is closed before 5 years and he has not transferred it, then tax can be deducted on it while withdrawing. TDS (Tax Deducted at Source) can be levied on withdrawal of PF for less than 5 years of service and more than ₹ 50,000.
If PF has been transferred, then your service is counted from the date of changing the job. But since the PF accounts are separate, this is considered a service break. This affects the tax exemption.
Duplicate entries and data mismatch in UAN
In the new system of EPFO, every employee is given a Universal Account Number (UAN). But if you do not transfer the new PF and do not provide the information of the old account, then the new company can generate a new UAN. In such a situation, you may have two UANs. This may cause problems in processes like data matching, KYC update and fund claim.
HR technology expert Meenakshi Rathi says, “Duplicate UAN can slow down your retirement process in future. The right way is to use the old UAN in the new job and transfer the PF immediately.”
Delay or rejection in final PF claim
If you do not transfer your PF from your previous jobs, EPFO will not be able to sum up your total service period. This can lead to your claim getting rejected or taking a long time when you try to withdraw funds after retirement or resignation.
For example, a person changed jobs 3 times in 12 years but did not transfer the first two PF accounts. Now at the time of retirement, his entire fund will not be visible in the EPFO records. He may have to go through the process of approval of the old employer, UAN linking and Form 13.
There may be a problem in the Pension Scheme (EPS) as well
A part of the employer’s contribution to EPF also goes to EPS (Employees’ Pension Scheme). To get pension benefits under EPS, the total service must be more than 10 years. If PF is not transferred, your service period will be broken and you may also become ineligible for EPS benefits.
EPS account balance is not visible online, hence it is important to maintain its record and also link EPS through PF transfer.
Easy process of PF transfer
Now the process of PF transfer has become completely online. You can fill Form 13 by logging in from your UAN portal. For this, you should have the details of both the employers and the bank and KYC updated. EPFO usually transfers PF within 10–20 working days. Let us know its step by step process.
- Log on tothe official siteof EPFO .
- Select Online Services > One Member – One EPF Account (Transfer Request).
- Select old company and submit Form 13.
- The transfer will take place after approval from your employer.
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