Provident Fund Account is wherein employees’ mandatory saving, social securities are being collected.
Usually, employees have a PF account in the organisation wherever they are working on. Employees need to transfer their PF account to the new organisation where they are switching the job.
Advantages of EPF transfer
1- Tax Impact
If an employee closes his/her PF account before 5 years, then the amount becomes taxable, employees can enjoy his/her earned amount if he/she transfers the fund.
2- Interest Accumulation
Provident fund contribution gets the interest on an annual basis. If an employee withdraws the PF contribution, it will give a loss the benefits of compounding. Transfer of EPF account rather than is always beneficial and helpful to build a substantial corpus without losing out on the benefits of compounding.
3- Free from the deficit in retirement savings
If an employee withdraws the accumulated corpus at the time of switching the job can be the cause of a deficit in retirement savings.
Hassles in transferring PF account
If we talk about the process of transferring PF account, it seems a complicated process where :
- The employee who is switching the job has to get form 13 from EPFO,
- To fill up all the details required in the form.
- To get the signature by ex-employer and submit to new employer.
This is the process of transferring PF account to the new organisation.
Now just know about the new plan about the automatic transfer of PF account.
Automatic transfer of PF account
Today’s era is the digital era where the things are being done without so lengthy process. EPFO decided to bring a worker friendly plan where PF account will be automatically transferred while switching the job. And no application form will be required for this automatic transfer of PF account.
Link with Adhaar ID
Adhaar ID is playing a crucial role in the automatic transfer of PF account for the purpose of avoiding any fraudulent withdrawal of amount from any PF account.
This strategy of linking Adhaar number to one’s PF account is the key of getting one’s PF account transferred automatically while switching the job.
After having a brief detail about this new plan it won’t be wrong to say it is a big and worker friendly step towards the ease of employees by EPFO.
Sometimes employees don’t prefer to transfer their EPF to their new jobs due to hassles of a lengthy process.
Although there is an online process for the purpose of transferring PF account but, this is a very fair revolution in the corporate world in the favour of employees in the rush of various professional issues.