EPFO: If you are also planning to change your job, then this news is for you. Actually, today in this news of ours, what mistakes do you make unknowingly while changing the job. We are going to pay attention to those mistakes which cause you a big loss.
If you don’t change your job, how will your salary increase? This is such a line which is heard in almost every office. Many people change jobs every two-three years to increase the salary and get better opportunities. But with the change of job, while enjoying the increased salary, people often forget to do one important thing, for which they have to pay heavy taxes.
We are talking about merging PF accounts. As soon as you start a job, you get a UAN i.e. Universal Account Number from EPFO. Within this UAN, your company opens your PF account. Every month your and your company’s PF contribution is deposited in your name in the same PF account.
When you change jobs, you give your UAN to the new company, the company opens another PF account of yours under that UAN. After this, the PF contribution of you and the new company starts getting deposited in that new account. It is important that after opening a new PF account, you merge the previous account with the new one.
What is the rule of PF withdrawal?
According to the rules, if you have worked in a company for less than five years and your PF deposit is less than Rs 50,000, then you will not have to pay any tax while withdrawing it. On the other hand, if the amount is more than 50 thousand, then you will have to pay 10 percent TDS. If you have completed five years, then you will not have to pay any tax on withdrawing PF.
What will happen if PF is not merged?
If you merge your PF accounts, then UAN will merge all your work experience. Meaning if you have worked for 2-2 years in three companies and if you have merged your PF accounts then your experience will be six years. But if you have not merged PF, then the duration of each company will be counted separately. So, if you withdraw money from your PF account if you do not merge, then each company will have a different count for two years and you will have to pay 10-10 percent TDS on all three.
Suppose you worked for two years in X company, where you have 55 thousand deposited in your PAF account. While you worked in Y company for two years, there is 60 thousand deposited in your PF account and in Z company you worked for two and a half years, there you have 75 thousand deposited in your PF account.
If you keep your PF accounts merged, then UAN will count your total work for seven and a half years by including X, Y and Z and you will be able to withdraw the entire Rs 1 lakh 90 thousand without paying any tax. On the other hand, if you did not merge, then you have not completed five years in any company. In such a situation, you will have to pay 10-10 percent tax separately in all three. Means you will get only 1 lakh 71 thousand. Means loss of 19 thousand rupees.
What is the process to merge PF account?
- Login to EPFO’s Unified Portal with your UAN number and password.
- After logging in, go to Online Services. There click on ‘One Member – One EPF Account (Transfer Request)’.
- Verify your personal details and PF account of current employer.
- After this, you will click on Get Details, then the list of your old employers will open.
- Click on the account you want to transfer here.
- After this click on Get OTP, OTP will come on your registered number, enter it and submit it.