EPF

On Maturity of PPF Account: Individuals, particularly those who are not salaried workers, may benefit from the Public Provident Fund as a medium for long-term savings and as a means of preparing for retirement. PPFs are long-term investments that mature 15 years after the end of the financial year in which they were first purchased. This article has a brief description of PPF and what happens when a PPF account reaches maturity.

PPF’s Maturity

The maturity of a Public Provident Fund (PPF) account is 15 years, but the calculation begins at the financial year’s end in which the account was opened. For example, if you get a PPF account opened on July 15, 2000, your 15-year term would begin on March 31, 2001, at the end of the fiscal year 2000-2001. The lock will be in place until March 31 2015, and you will be able to withdraw only after April 1, 2016.

After 15 years, you can choose between two options:

1. Withdrawing the maturity account and then closing the account, OR
2. Keep the current PPF account open for another 5-year block duration. After the first five years have passed, you will continue to extend the PPF account for another five years. There is no limit to the number of extensions that can be created.

Let’s say your PPF account’s term is set to expire on March 31, 2015. The account balance at the time was about Rs 10 lakh. You can now choose to keep the account open for another five years (until March 31, 2020) and continue to invest as you have been. However, you can only withdraw Rs 6 lakh (60 percent of the balance on your credit on March 31, 2015) over five years until March 2020.

E.g., if you started a PPF account in the fiscal year 1999-2000, it will mature on April 1, 2015. You have the option to either cash in your PPF balance or extend the maturity of your PPF for another five years until 2020 from April 1, 2015, to March 31, 2016. You will continue to add to your PPF account after 2020, for example, to the years 2025, 2030, and so on.

Note: Once your PPF account expires, you can open a new one, but you’ll have to start over.

Continuation of PPF

You have two options for keeping your PPF account open:

• Keep going without making any added contributions – You can choose to receive the tax-free interest but not contribute any additional funds, OR
• Keep going while making the added contributions – The rules for contributing to the extended account remain the same as they were during the 15-year cycle, i.e., you can demand 80C deductions on amounts invested in PPF and invest up to the maximum limit (which is 1.5 lakh (150,000) for FY 2014-15 and FY 2015-16). Form H must be completed and submitted by the investor.

Online, you can download FormH in pdf format. Please keep in mind that Form H must be completed and submitted within one year of the maturity date. So, if your PPF matured on April 1, 2012, you must fill out Form H to continue your PPF account with a subscription between April 1, 2012, and March 31, 2013. Form H must be completed and sent to the post office or bank where the account is kept. You must enter your PPF account number and the date the 15-year period ended. So, if you began your PPF account in FY 1999-2000, say in November 1999 or February 2000, and your PPF matured 15 years later on 31-Mar-2000, you could write 1-Apr-2015.

Please Note The Following

• Filling out Form H within one year of the account’s maturity date is the only way to expand the PPF account with a subscription.
• To renew, you must first complete Form H and then deposit for that year.
• The choice for no more contribution is the default, which means that if you do not choose the option with a subscription within one year of the maturity period’s conclusion, the second option without a subscription will be applied automatically.
• It is impossible to reverse a decision taken for five years.
• The subscriber cannot switch to a with-contributions extension after an account has been continued without contribution for any year.
• The interest gained on a PPF for a more extended period is also tax-free.

Liquidity for the Extension Period

Unlike the initial duration of the Public Provident Fund Account, when loans were only available after the third year, and partial withdrawals were only permitted after the sixth year, the extension period of the PPF is more liquid.

If the loan is extended without a contribution, that amount may be removed, but only once per year. If the balance is entirely removed, it will continue to earn interest.

If the loan is extended with contributions, you can withdraw up to 60% of the balance at the start of each extended period (block of five years).

Assume the term of your PPF account expired on April 1, 2012. The account balance at the time was about Rs 15 lakh. You can now choose to keep the account open for another five years (until March 31, 2016) and continue to invest as you have been. However, you can only withdraw Rs 9 lakh (60 percent of the balance on your credit on March 31, 2011) over five years until March 2016.

Closing or Extending The Account

Is it better to close this account and open a new one or keep it open for another five years?

I propose extending the contract for another five years. Even if you close this account and open a new one, the maturity will be delayed for another 15 years. You also gain more money if you prolong the account so there is more balance.

Non-resident Indians and Extension

The extension benefit does not apply to NRIs who opened their account before their residency status changed. Returning to PPF Basics, NRIs are unable to open a PPF account. If a resident already has a PPF account and then becomes an NRI, he will continue to invest in the PPF until the initial period (the first 15 years) expires. The PPF account will then be unable to be extended and will have to be liquidated.

The Bottom Line

After 15 years from the end of the financial year in which the initial subscription was made, you will close your Public Provident Fund account. You may also choose to extend the PPF for a 5-year block with or without a subscription.

Shifting NPS Account Sectors in NPS, Form ISS: NPS is considered a pension system meant to provide financial security to a person after his/her retirement. An employee can maintain only one NPS account on his/her entire service career irrespective of change in employers. Permanent Retirement Account Number is a unique identification number that is allotted to each NPS subscriber. PRAN or the NPS account is considered to be portable and can be moved if the employee is shifting from the government sector to the private sector. A person can have only one PRAN, just like he/she has only one PAN. This PRAN can be used in any sector, including government and private.

Changing the employer doesn’t affect the PRAN of the employees; thus, they can use the old account even if they are joining a new job. They can shift from one sector to another easily, from one state government service to another state government service, from one central government service to corporate and vice versa, etc.  So in case an employee has opened his/her PRAN account as a government employee and quits his/her job, he /she can still use this account under all citizen’s model by contributing a total of 1000/- in order to keep the account active.

Various Sectors or Models of NPS

Let’s discuss the different models or sectors of NPS. Currently, NPS and APY together have more than one crore subscribers with a total AUM (Asset Under Management) of more than 1 lakh crore.

Government Sector

• Central Government: On 1 Jan 2004, the Government released a statement making NPS compulsory for government employees (except armed forces). The statement states that every government employee is bound to make a contribution to the National Pension Scheme.
• State Government: NPS is applicable for all State Government employees, State Autonomous Bodies who have joined their government services after the date of notification released by their respective State Governments. Gradually, all State Governments started considering the NPS.

Corporate Sector

PFRDA (Pension Fund Regulatory Authority) launched the National Pension Scheme in December 2011. NPS is just like a Provident Fund as it is meant for securing the future of the employees. The biggest advantage of NPS is the tax benefit scheme which allows up to 10% deduction on the Basic Pay+ DA of the employer’s contribution on behalf of the employee. Even the employer can avail of tax benefit from NPS by showing this contribution as an expense in the profit and loss account. The NPS return rate for the corporate sector for the 1st year is around 13.59%.

All Citizens Sector

NPS is available for every citizen of India from 1 May 2009 on a voluntary basis. All Indian citizens who come between the age of 18 and 60 years as of the date of submission of application to the point of Presence are eligible to be a subscriber of NPS.

NPS Lite or APY or UOS( Unorganized sector)

NPS Lite or The Swavalamban Scheme was launched in order to provide retirement benefits to the unorganized sector. Under this scheme, the Government of India pledges to contribute 1000 per year; this will continue for five years for those who have a Swavalamban account, provided that the contribution states between 1000/- and 12000/- per year. The people who are forming these low-income groups are represented through an organization known as aggregators.

What is a Nodal Officer of NPS?

PFRDA has appointed NSDL (National Securities Depository Limited)  as the Central Record Keeping Agency (CRA) and entitled them with the responsibility to maintain the records of contribution and its deployment in different pension fund schemes that the employees have applied for. The records of each employee’s contribution will be recorded in an account which is known as Permanent Retirement Account. This account can be identified using PRAN.

The nodal office is responsible for interacting with the CRA on behalf of the NPS subscriber. Government offices like DTO and DDO act as nodal offices. CRA-FC is considered a facilitation center appointed by the CRA and is responsible for facilitating nodal offices to submit the application for alloting PRAN to different employees and submitting an application for change in a signature subscriber’s photograph.

• Nodal offices which come under the Central Government include the Principal Accounts Office (PrAO), Pay and Accounts Office (PAO), and Drawing & Disbursing Office (DDO).
• Nodal offices which come under the State Government include the Directorate of Treasuries and Accounts (DTA), District Treasury Offices (DTO), and Drawing & Disbursing Office (DDO).

Shifting NPS Using Form ISS

An NPS subscriber has the right to shift from one sector to another sector or from one office to another office with the same PRAN. When one is planning to shift his/her NPS, he/she needs to submit ISS Form in order to begin the shifting process. The steps that are involved in submitting this form is as follows:

• One has to fill in the details regarding the shift he/she is going to make. Whether the shift is from the state government to state government or government to corporate had to be mentioned in the form.
• The appropriate documents must get attached to the form.
• The form with the required documents has to be submitted to the target POP-SP.
• They will provide the subscriber with a stamped acknowledgment.
• Once the details are verified by the authorities, the change will get notified to the subscriber.

Before going forward with the shifting, please note

• The PRAN of the subscriber should be active.
• Details such as PRAN number, employer information, and salary information must be recorded in a similar way as it was recorded in NPS.

Shifting NPS Form ISS (Inter Sector Shift)

The details that are to be given in the ISS Form are as follows:

• Name and address of the subscriber, details of the PRAN, details of the existing and new POSP.
• One must ensure that the PRAN details are correct, and he/she must attach a copy of the PRAN card also.
• One must provide the details of the DDO/POP-SP to which the PRAN is associated.
• The subscriber must also provide the details of the DDO/POP-SP to which the PRAN will get associated once the shifting is done.
• The sector section for ‘Existing PRAN association’ and ‘Target PRAN association’ is considered to be the same when the subscriber is meant to shift from one state government to another state government.

Subscriber from every sector is required to fill up the declaration part in the ISS form. After successful verification of the change request form, the POP-SP accepts the declaration form, after which they will issue a 17 digit receipt number as an acknowledgment to the subscriber.

The nomenclature of the receipt is as follows:

• First, 2 digits starting from the left – Type of request (19 for Subscriber shifting)
• Next 7 digits – Registration Number of POP-SP e.g., 6000002
• Next 8 digits – Running sequence number eg.00000001
• For Example, 17 digit receipt number will be “19600000200000001

It is the duty of the POP-SP to hand over the acknowledgment receipt to the subscriber to show that they have accepted their request. The POP-SP must affix the seal, as well as the user, must sign the acknowledgment before making it available to the subscriber.

How to Make Withdrawals in a Public Provident Fund Account (PPF): Public Provident Fund (PPF) is a tax-free renowned scheme that is related to small-time savings. The interest earned in a Public Provident Fund is at an 8% tax-free interest rate. In terms of long-term investment, the Public Provident Fund is a crucial yet beneficial tool for individuals. The Features of a Public Provident Fund are as follows;

• An individual has to deposit Rs.500 minimum per year in his/her PPF account.
• A deposit of Rs.1,50,000 is the maximum limit in a PPF account. A deposit of Rs.70,000 was the earliest maximum limit in a PPF account but it changed to Rs.1,00,000 after 30th November 2011 i.e. from 1st December 2011. In August 2014, the new maximum limit for a deposit in a PPF account was set to Rs.1,50,000.
• An individual can make several installments in his/her PPF account in the manifold of Rs.50. There is no specific upper limit on the number of deposits and one can make as many installments as he/she wants but concerning the maximum limit in a PPF account. The rule of maximum limit on the number of installments that was 12 times a year, was removed and ruled out after November 2019 i.e. removed from December 2019.
• The investment duration is set for 15 years. In this case, the effective period adds up to 16 years i.e. the year of account opening and the 15 years addition.
• A financial year basis format is regulated for a PPF i.e. from April 1st to March 31st. The interest on a PPF is credit at the end of the financial year.
• The calculation of PPF is done monthly operating on the lowest balance from the end of the 5th day to the last day of the month, nevertheless the interest into the PPF account is only added back at the end of the financial year.
• There is no guarantee of the interest in the PPF account even though the interest earned is fixed for one financial year in the PPF. The actual benchmark for a PPF is 0.25% higher than the average government bond yield after the 10-year government bond yield.
• According to Section 80C, the limit set for the amount invested by an individual who is eligible for deduction is under Rs.1,50,000. Insurance premiums and children’s school fees are some beneficial expenses under Section 80C as deductions. ELSS, 5-year FD’s, NSC, etc, are some of the approved investment mediums that come under Section 80C as deductions. (Rs.1,50,000 was the revised limit set in August 2014 under section 80C)
• Section 10(11) of the Income Tax Act states that interest earned on the investment is exempted from the tax.
• There is no option to open a joint account with another individual and the account can only be under one individual’s name.

Close PPF Account Before the Maturity Period

The process to close the PPF account earlier. The PPF account, before 1st April 2011, before the completion of 15 years could not be closed unless the individual who opened the account was deceased. Only the nominee appointed by the individual for his/her PPF account who passed away has the authority to close the account by submitting all the required documents. Hence, the amount in the amount can only be withdrawn at the end of the maturity period but unaware of the rule, most of the banks and post offices do not have the details.

Time to Close PPF account

An individual can close his/her PPF account and withdraw the total sum of the amount to date, under certain circumstances. (On 1st April 2016, the new rule came into effect and then modified in December 2016)

Conditions for Premature Closure of PPF Account

• Excluding/After the year on which the account was opened, the PPF account should have completed 5 years.
• In cases of serious illness or higher education of children, the premature closure of PPF accounts is permitted.
• It has to be confirmed by the banks whether the account holder, spouse, children, or parents are suffering from a serious illness or a life-threatening disease, and the documents like medical treatment reports, files, and maybe a verified legal bill are required.
• For higher education for children, the proper required documents should be submitted for premature closure of the PPF account. Documentation like fee bills and confirmation letters of admission by the concerned university either in India or abroad are obligatory.
• An individual needs to present and submit a copy of his/her passport or Income Tax Return in case of change in residency status of the individual. This rule came into effect in 2019.

Penalty for Closing PPF Account

An individual going for premature closure of PPF has to pay the penalty of 1% less interest in all the previous years.

Form for Premature Closure of PPF Account

• New Form: A new form named Form 5 was introduced in December 2019. The sample of the new form is provided as follows;
• Old Form: An individual has to visit his/her concerned bank or post office branch and submit the PPF account closure form there. The sample of the old form, Form SB-7A, is provided as follows;

Alternatives to Closing PPF Account

PPF is considered to be one of the most beneficial schemes for long-term investment as one can gain from a triple tax benefit. A loan from PPF and partial withdrawal from PPF are the two aspects that an individual should consider before the premature closure of his/her PPF account.

Loan Facility in PPF Account

An individual is eligible to borrow from PPF between the 3rd and the 6th financial year of opening the PPF account. Loan facilities of the PPF are as follows;

• One can borrow from PPF between the 3rd and the 6th financial year of opening the PPF account.
• Exactly 25% of the amount can be taken up as a loan in the account of the individual at the end of the 2nd year immediately preceding the year in which the loan was applied. For example, if someone has applied for a loan from PPF in June 2014 at 25%, he/she will be eligible for a loan at 25% on 31st March 2014.
• The loan has to be repaid within 36 months and it can be repaid in total amount or two or more installments.
• An individual has to apply, fill and submit Form D along with the passbook of his/her account to get a loan.

Partial Withdrawals in PPF Account Before The Extension of PPF Account

In case of partial withdrawals before the extension of the PPF account, if the individual has not extended the PPF yet, he/she can make partial withdrawals from his/her PPF account after the expiry of 5 years from the end of the financial year in which the investment was made. So, from this, we can conclude that partial withdrawals from PPF accounts can be made from the 7th year. Conditions for premature withdrawals are as follows;

• If the individual has not extended the PPF yet, he/she can make partial withdrawals from his/her PPF account after the expiry of 5 years from the end of the financial year in which the investment was made.
• There is a limit set on withdrawals made per year which is only once a year.
• An individual is eligible to withdraw up to 50% of his/her account balance at the end of the 4th year immediately preceding the year in which the request was made, or balance on last year, whichever is lower.
• An individual has to apply, fill and submit Form C song with the passbook of his/her account to make withdrawals.
• In case of withdrawal from a minor’s account, a declaration from his/her guardian is required to find out whether it is for the use and benefit of the minor or not.

Partial Withdrawals in PPF Account After The Extension of PPF Account

In case of Partial withdrawals in PPF account after the extension of PPF account, if the individual has extended his/her PPF account (after account completion i.e.15 years) by 5 years, then;

There is a limit set on withdrawals made per year which is only once in a financial year.

After 60% of the credit balance, withdrawals on the total amount are then restricted at the start of the extension block of 5 years.

The individual has to apply, fill and submit Form C song with the passbook of his/her account to make withdrawals.

What Is A Provident Fund?

A provident fund is a compulsory retirement savings scheme that is managed by the Government. The Employees’ Provident Fund Organisation is responsible for the regulation and supervision of pension and provident funds in India.

It was set up with the motive of providing financial support to workers and their dependents in case of premature death or after retirement. The EPFO issues a twelve-digit number called the Universal Account Number to employees who are contributing to EPF.

Now the problem is how an employee will know whether the employer is contributing to his/her EPF contribution. We will read in this article the steps that an employee can follow if the employer is found not depositing to EPFO or trust. It has been found that several companies deduct contributions towards provident funds but do not deposit the contribution to the trustor EPFO.

According to the employee’s perception, he/she knows that the benefit will be provided to him/her on resigning or retirement, but hell breaks loose when they get to know that the employer was not depositing the contribution.

There are two parts of employee contribution to provident fund: one is contributed by the employee, and another is contributed by the employer.

The employee contribution is around 10 or 12 percent of basic salary. For women employees, it is 8 percent of basic salary for the initial three years and converts to 10 or 12 percent of basic salary after that.

The employer also contributes an equal amount of 10 or 12 percent of the basic salary that the employee contributes.

Ways To Check Whether The Employer Is Depositing Employee’s Contribution To EPFO

There are specific ways to check online whether the employer is depositing EPF contributions to EPFO. Some of the methods are given below:

Through The Official EPFO Website

Employees can check the Provident Fund website to find out the monthly provident fund deposit by the company. Individuals can verify through this information whether their contribution is being deposited by the employer to EPFO. But it must be noted that the actual money of each individual is not available. The total money deposited by the employer is recorded in the books. This contribution data is available only for those companies who are depositing the EPF money by availing the E-Challan and Receipt (ECR) facility. One can check this by visiting the Establishment Information Search at the EPF website.

The steps are given below:

• Details of deposits can be searched through the establishment code numbers (7 digits) or through the establishment name. E.g., if you search ‘Infosys’ you will get records of twenty-four different establishments.
• Search your establishment name and click on the ‘View Details’.
• After scrolling down, click on the ‘View Payment Details’.
• Look for the Key icon towards the end of the row.
• Now click on the “Payment” icon on the second row, you will get all the records of your establishment’s EPF deposits done electronically. Details like ‘Date of Credit’ to EPFO, the ‘No. of Employees’ whose money has been deposited by the employer, and the total ‘Amount’ credited will be shown.

Through SMS Facility To Registered UAN Holders: Individuals can register the Universal Account Number so that updates regarding deposits by the employer are sent to the employee through SMS alerts. This is similar to SMS alerts from banks whenever an individual’s bank account is debited or credited. But some institutions are exempted, and therefore employees of such institutions cannot avail of such facility. The format of the SMS from EPFO is as follows: ‘Dear member (UAN <10 digit UAN number>), Rs XXXX for 03/2021 has been credited in your EPF account. For details, download m-epf mobile app from Google Play Store.

Through E-passbook: E-passbook maintains the transaction records of an individual’s EPF account. It records and maintains any amount that is deposited by the employer on behalf of the employee. The passbook generally gets updated in batches, and it is outdated most of the time. An individual who has recently opened an EPF account will not find any records available in the passbook.

Steps An Employee Can Take If The Employer Fails To Deposit The EPF Contribution To EPFO

There are several companies that deduct contributions towards provident funds from the employees but fail to deposit such amounts with the EPFO or their trust. The employees believe that they are contributing to the provident fund and can have the amount after retirement or after resigning from the job. But later on, they get to know that the employer was not depositing the money, and that’s when the problem arises.

Employees do not know how to handle such situations or what to do when such situation arises. They don’t know whom to complain about such defaulting employer.

It is a legal offense to deduct from salary contributions for provident fund and not deposit the same with the EPFO or their trust. The financial problems of the company is not an excuse for failing to pay the contributions of the employees to EPFO.

When the company deposits the employer’s and employee’s contribution regularly to the provident fund office, it is controlled by the provident fund office. The employer should be held responsible for failure of payment and should be held liable to pay.

An employee can claim a copy of Form 12 to know whether the employer is depositing the provident fund contribution and the details of money deducted. The Employers are required to send this form to EPFO by the end of each month. But it is often seen that employers decline to furnish Form 12 to employees.

The employees can also file a Right to Information application to the regional provident fund office when the employer refuses to provide the details of provident fund contributions. Employer code and the employee’s provident fund account number is to be mentioned while filing such application.

The following can be done if the employee finds that the employer is not contributing:

• The issue can be addressed to the provident fund department by informing them of the details in their official email id. Individuals can also furnish a written complaint to the regional provident fund office and can get suitable contact details at the official EPFO site.
• Employees can file a complaint with the local police station regarding non-payment of provident fund contributions on the part of the employer.
• Employees can also file a complaint to the Chief Vigilance Officer appointed by the Ministry of Labour.
• Employees can also approach the regional provident fund inspector and file a complaint about action against the employer. It is to be noted that for any complaints regarding the provident fund, the employees need to furnish their salary slips that show the deduction for provident fund, provident fund registration number, employer’s name and address if possible.

According to EPFO, if a company is non-compliant with its provident fund deposits, the company has to pay the dues along with penalty interest, depending on the tenure of delayed payment. They are as follows:

• If the delay of payment is for less than two months, there will be a yearly interest payment of five percent over and above the amount payable for the number of days of delay in payment.
• If the delay of payment is for two months and above but not more than four months, ten percent interest will be charged yearly over and above the amount due for payment.
• If the delay of payment is for four months and above but not more than six months, then fifteen percent yearly interest will be charged above the due amount.
• If the delay is for six months and above, then twenty-five percent interest will be charged above the amount due for payment.

Contribution To EPF While Employer Claims Financial Problems

The Company Auditor who audits financial books of accounts of the company has to make sure that the company is depositing the provident fund contributions to the EPFO. Under Companies Audit Report’s Order (CARO), 2003, the auditor has to particularly state whether the company is regularly depositing provident fund due to the EPFO authority and, if not, the amount of arrears of provident fund shall be reported by the auditor. The auditor also has to take into account the period for which the payment of dues has not been made.

The CARO, 2003 requires the auditor to particularly state if the undisputed dues of the provident fund have been deposited regularly with the EPFO authorities. The auditor should report if the payment is not made, the amount of the arrears of provident fund on the last day of the financial year that is concerned for a period of more than six months from the date they became payable.

The companies who are not regular in their payment of provident funds provide excuses for the unstable economic condition of the company. Such excuses are not entertained for the failure of payment in the provident fund. The auditor should include such an amount of arrears in their reports.

Withdrawal Of Provident Fund While Company Claims Financial Problems

The Provident Fund withdrawal form is often ignored by employers citing reasons for financial problems. But employees need to know that provident fund withdrawal has nothing to do with the company’s financial crisis. The employer, after deducting the provident fund contribution from the employee’s salary, must deposit the amount to EPFO.

After the employer receives the provident fund withdrawal form from the employee, the employer must submit the provident fund withdrawal forms to the concerned provident fund office within five days of receiving the form.

The acknowledgement slip issued from the provident fund office should be passed on to the employee. Effective communication modes must be adopted to carry forward the acknowledgement slip to the employee through courier, by post, email, or through SMS.

It is advised to keep documental evidence of submitting provident fund forms to companies and an acknowledgement from the company of receiving the said form. This should be done to counter later claims from companies of untraceable forms or claims of not receiving the forms.

When The Employer Or The Company Becomes Insolvent

According to Section 11 of the Employees’ Provident Fund and Miscellaneous Provisions Act 1952, when the employer is deemed as insolvent or if the employer is a company and an order of winding up of the company has been made, the arrear amount from the employer, whether in respect of the employer’s contribution or employee’s contribution must be included among the liabilities that are to be paid on a priority basis like all other liabilities by selling the assets of the company or the property of the insolvent.

In other words, such nature of payment is considered as preferential payment over others, provided the liability accrued thereof has been acknowledged before the order of winding up is made or is regarded as insolvent.

What Happens To EPS When You Transfer Your Old EPF To New Employer: EPF or Employee’s Provident Fund and EPS or Employee’s Pension Scheme are two terms coined under the Employee’s Provident Fund & Miscellaneous Provisions Act, 1952. The Employee’s Pension Scheme provides a saving opportunity for individuals to be used after their retirement. Under the Provident Fund Scheme, both the employer and the employee of a particular organisation contribute towards the fund. The entire amount of the contribution is accumulated and earns interest until the retirement of the individual.

Under the Employee’s Provident Fund, The employee’s contribution is 12% of his/her salary. The EPF account offers an attractive rate of interest which is 8.5% per annum. It is a saving instrument that applies to every individual working in an organisation registered under the Employee’s Provident Fund Organisation or EPFO. EPF is mandatory for all organisations where the workforce exceeds 20 employees.

When an employee changes organisation, he/she must transfer his/her EPF account from the old organisation to the new organisation to comply with the rules of the Employee’s Provident Fund. When the EPF is transferred from one organisation to another, it is mentioned in the Universal Account Number or UAN passbook issued by the EPFO. But, the passbook does not show any information relating to the transfer of EPS.

So, What happens to an EPS account during the transfer of EPF? Let us discuss this in detail in this article.

When One Can Transfer Old EPF Account To New Employer

The EPF is for employees who are contributing to the scheme under the Employee’s Provident Fund Organisation. Each employee registered under EPF is provided with a unique account number called Universal Account Number or UAN. The UAN remains the same throughout the employment life of an employee, and even if he changes organisation, still the UAN remains intact. The UAN can help access the details of the employee.

When an employee changes his/her working organisation, he/she can transfer the EPF account to the new employer by updating the UAN with the new employer. The transfer allows the employee to keep contributing to the fund without any hassle.

The EPF account can be transferred with the help of EPFO’s online facilities. The online facilities of the EPFO can only be accessed after completion of the KYC procedure with the EPFO. The claim to transfer the PF account should be attested by the employee’s current or previous employer. As soon as the EPF account is transferred, the old EPF balance will also be transferred to the new EPF account. One can also check their balance with the help of EPF Account Balance via Mobile Phone, SMS and so on.

What is EPS?

EPS is the abbreviated form of Employee’s Pension Scheme, and it is initiated by the government to ensure that every employee is provided with a pension after his/her retirement. The EPF and EPS go hand in hand, and each employee who contributes to the EPF is eligible for EPS. The employer provides 8.33% of the salary of an employee towards the EPS.

Here are some of the Key feature of EPS:

• EPS offers an opportunity to avail lifelong pension to each and every employee contributing to the EPF.
• As per the EPS scheme, the employer has to contribute 8.33% of the actual salary or ₹6,500 or ₹15,000, whichever is the minimum. If an employee’s contribution is less in terms of amount or number of years, then his/her pension amount will be less.
• EPS contribution does not receive any interest as the EPF fund does.
• An employee can only avail of the pension amount after completing 10 years of service or after attaining 58 years of age.
• An early withdrawal of pension amount is available to employee after attaining 50 years of age, but it is subjected to a 4% discount factor.

What Happens To EPS During PF Transfer

We all know that when an employee changes his/her organisation, he/she has to validate the UAN with the new employer, which would allow him/her to transfer the EPF account from the old organisation to the new.  Now, the big question is, what happens to EPS during the transfer of EPF?

So, when an individual changes his/her job, he transfers the amount of PF from the old to the new organisation, but the pension amount that is not transferred remains intact with the old member ID. But, the number of years an individual has worked can be tracked easily with the help of service details, which will again help him/her withdraw the pension amount. Here, the EPF is consolidated into one account but, the EPS amount is reflected in the passbook of the UAN.

Annexure K And Its Relation With EPS

When a person searches the UAN helpdesk for EPS transfer, he/she finds information displaying, “While Transferring PF from One Establishment to Another, the service detail information is furnished to the receiving PF office in the Annexure K which will be used to calculate the pension amount.” So what is Annexure K?

Annexure K is a document that contains all the details of an EPF account of an employee. It is furnished within the regional EPF offices, with the employee’s transfer from one organisation to another.

Any employee can obtain Annexure K by following the procedure mentioned below:

• Go to http://epfigms.gov.in/
• Click on Register Grievance to register a complaint of EPF. You can easily obtain Annexure K.

When Can A Person Withdraw The Pension Amount From EPS?

An employee registered under the EPFO is eligible to receive the pension amount only after completing 10 years of service. However, the employee must be 50 years or 58 years of age to withdraw the pension amount. If an employee wants to withdraw the pension at an early stage, he/she can do so after attaining 50 years of age but before attaining 58 years of age. The early withdrawal of pension amount is subjected to a 4% discount rate.

In case an employee changes his/her organisation, and the present organisation is not registered under EPFO, then he/she can apply for a scheme certificate under the EPFO, which will be helpful to them in the future.

An EPS scheme certificate is a document issued to every employee registered under the EPFO, which contains their service details. It also contains the family details of an employee, which facilitates easy identification of the nominee to the pension amount after the employee’s death.

How To Check Member IDs Or PF Accounts Linked To UAN: There are two ways to determine how many Member Ids or PF accounts are connected to your UAN. EPFO issues a Member Id, also known as a Member Identification Number, or an Employee Provident Fund (EPF) account number, to enable employers to send EPF and EPS contributions on behalf of their employees. When you change jobs, your EPF contributions are transferred to a new PF account number, also known as a Member Id. These various Member Ids should be linked to UAN starting in 2014. The distinction between a UAN and a Member Id is explained in this article. It shows how many Member Ids are connected to UAN in detail with photos. The two methods for determining how many of Member Ids are possible are as follows:

1. At Member Home, log in to the UAN Portal and choose View-> History of Service.
2. Go to the EPFO website and pick Know Your Claim Status under Our Services->Employees. Hit Enter after entering your UAN and Captcha. You can see a list of PF Accounts that are linked to a particular UAN.

Any missing PF numbers must be connected to UAN using the One Employee One PF connection.

What is the Difference Between a Member Id and a User Account Number (UAN)?

The employer pays the EPF (Employee Provident Fund) to the EPFO (Employee Provident Fund Office) on behalf of the employee. This covers both employee and employer contributions, as well as the Employee Pension Scheme. EPFO issues a Member Id, also known as a Member Identification Number or a PF Account Number, to enable employers to send EPF and EPS contributions on behalf of their employees. It’s as though the employer establishes an EPF account for its employee and contributes to it monthly.

The format of the Member ID or PF Account Number is as follows. It’s possible that your PF Account Number doesn’t have an Extension code. For example, the code for someone working in Bangalore may be BG/BNG/012345/789.

Office code of EPFO/ Establishment code which is maximum seven digits/ extension which is maximum three digits/ Account number which is maximum seven digits

BG/BNG/012345/0001789 is an example.

The Universal Account Number (UAN) is a unique identifier for each person. A 12-digit number is assigned to an employee who contributes to the EPF. A single UAN (Universal Account Number) should be assigned to each employee. Your UAN will be connected to all of your Provident Funds or Member Ids. It will keep track of all of your Member IDs. It’s like having multiple savings accounts, but they’re all linked to your single Permanent Account Number or PAN. So, if you change jobs and your new employer contributes to EPF, you’ll get a new Member ID. Your UAN number must be connected to this new Member ID.

How to Use the UAN Member Website to Check the Number of PF Accounts Connected to Your UAN

Log in to the UAN Member Website and select View->Service History from the drop-down menu.

You’ll see a list of the different companies where you worked, along with the dates that you started and left. The following details will be shown.

• Your PF account Number or the member id
• Your name, as mentioned on the EPF records of the organizations.
• Company name for which you worked
• DOJ EPF (Date of joining Employee Provident Fund) – The date of starting your EPF contribution. It must also be the date of joining.
• DOE EPF (Date of Exit of Employee Provident Fund) – the date when the employer stops the contribution in your EPF account. It must be your resignation date.
• DOJ EPS (Date of joining of Employee Pension Scheme) – This date is mentioned the same as DOJ EPF.
• DOE EPF (Date of Exit of Employee Pension Scheme) – This dame is the same as the DOE EPF.
• DOJ FPS – FPS means Family Pension Scheme of 1971, and it is not more than the operation. Employee Pension Scheme (EPS) replaced the FPS in 1995, and FPS is now called the Ceased Pension Scheme. This is not available for the employees with a joining date after 1995.
• DOE FPS (Date of Exit of Family Pension Scheme) – This date is unavailable for the employees with a joining date after 1995.

More information is available by selecting Detailed View from the top right-hand corner.

How to Determine the Number of PF Accounts Connected to Your UAN Using Member Claim Status

Go to the EPFO website and pick Know Your Claim Status under Our Services->Employees.

Hit Enter after entering your UAN and Captcha. You can see a list of PF Accounts that are linked to a particular UAN.

You can see your transfer information by clicking on the connection from where you transferred the account, in our case, BGB002000000000003.

The message “No record is available for member id ABCD00000000” appears for accounts for which no move has occurred or for which no claim has been filed.

How to Correct EPF Details like Name, Father Name, Date of Joining: Most of the time, the date of birth and name details in the EPF account don’t resemble the details in the Aadhaar. If left unchanged, there can be undesirable annoyances during EPF amount withdrawal. It is crucial to update your EPF account with the correct details at the quickest to avoid any troubles later.

EPF benefaction into an employee’s EPF account is made each month in similar proportion, both by the employer as well as the employee. This is more of a kind of enforced savings scheme issued by the Government of India, which helps employees garner a retirement corpus.

• Details of UAN
• EPF Name Correction Online
• Attestation Requirements
• How to Update Father’s Name in EPF?
• Issues Caused by Errors in EPF Details

Details of UAN

When we enter an organisation that offers EPF, then we have to fill Form 11. Form 11 is a vital declaration form that facilitates the provident fund department to sustain records of employees, helping them during inquiries and cross-checking of facts. It also contributes precious information about an employee to an employer. Our article EPF Form 11 on Joining a New Job explains it in detail.

Personal Information that is required to enters by the individual in Form 11 is as follows:

1. Date of Birth of the employee
2. Father’s/Husband’s name
3. Gender
4. Mobile number
5. Marital status
6. Date of joining
7. Email ID
8. Educational credentials

The features that you record can be checked in your UAN passbook or EPF passbook from the online portal of EPF services using the document number of the individual. This will help the person to get overall details such as date of Birth, Name of employee name, Date of Joining and EPFO office( or the SRO, which stands for Sub-regional office). This essential information will help the person to check their account details. The individual can check their name, their Father/Husband’s Name, Date of Birth, Date of Joining.

Most of the time, the date of birth and name details in the EPF account are incorrect, i.e. they don’t match with the details specified in the Aadhaar. If left unaltered, such flaws can cause unnecessary troubles during EPF amount withdrawal. Thus, it is crucial to update your EPF account with the correct details at the earliest to bypass any concerns later.

EPF name correction is a simple process that can be done online as well as offline with the help of EPF name correction form.

EPF Name Correction Online

To replace or renew your credentials online on the EPFO unified portal, one will require the subsequent details:

• An active UAN-Universal Account Number
• Correct Number of Adhaar.
• Access to EPFO Unified Portal
• An online request from your employer to the EPFO

Before embarking on EPF name correction, ensure that the information on their Aadhaar card is accurate. This is because updated details of the individual will get verified against their Aadhaar, and if the credentials don’t match, then the update won’t happen. So, make the corrections in the Aadhaar first and then update it with your EPFO account before altering your name and other credentials.

The online process for how to change the name in PF account online, which employees should follow, is described below:

• Step 1: Go to the EPFO Unified Portal and log in with the UAN and the password.
• Step 2: On the new page, go to the “Manage” option on the menu bar and select “Modify Basic Details” from the dropdown.
• Step 3: When the new page will appear, then, as mentioned in the Aadhaar, enter all the right details. The system with the Aadhaar database would verify your entered details. After registering all the required details, click on “Update Details”.
• Step 4: Once you click on “Update Details”, the request will get submitted to your employer for approval. Before the employer submits the request to the EPFO, the employee has the option to withdraw their request by hitting the “Delete Request” button.

EPF Name Correction Form

Name correction can be done by submitting the EPF name change form to the Regional PF Commissioner as well as offline. This method is more like a collective declaration letter between the employee and the employer, addressing the Regional commissioner of PF.

So, one must hold to the following EPF name change letter format in your EPF name correction form:

The letter ought to be delivered to the “Regional PF commissioner”. The subject of the letter ought to mention: “Joint declaration by the member and also the employer”.

The body of the letter should mention the wrong details in the EPF account that your employer has entered, and to make corrections to the existing details, you are writing this request letter.

Next, generate a table of three columns and implement particular details which you require to change. The table must specify the incorrect entry plus the corresponding right entry.

The EPF correction form is applicable for correcting the following types of errors:

• Incorrect EPF or EPS account numbers
• Incorrect date of birth
• Incorrect name
• Incorrect name of father or husband
• Incorrect date of joining the company
• Incorrect date of leaving the company

All these details will be designated in the form. You must only fill the required ones that need emendation. After filling the correction form, specify the list of documents you are presenting as proof to support your correction request.

Attestation Requirements

Please attach a copy of proof of your name and self-attest it with your sign.

Then, the name of the authorised signatory for the company must be mentioned.

The authorised signatory needs to sign the form followed by the company stamp.

How to Update Father’s Name in EPF?

In order to update or execute corrections of a person’s father’s name or date of birth in the EPF account or wondering about how to change father name in UAN, then with these simple steps, one can do it:

The process for updating the father’s name, date of birth or husband’s name is the same as that of the correction process of EPF name. An individual must fill the form of the joint declaration and enter the appropriate details required to be corrected.

After filling the form, it must be signed and stamped by your company’s authorised signatory. Then, the form is required to be submitted to the commissioner of Regional PF. You should also add the form with event documents as proof to verify the required correction.

Documents accepted as proof are:

• Aadhaar card
• PAN card
• Voter ID
• Ration Card
• Copy of bank passbook
• Driving licence
• Passport
• ESIC ID card
• Date of birth certificate
• Education certificate
• Copy of electricity bill, water bill, telephone bill

Issues Caused by Errors in EPF Details

Usually, faulty EPF details form an issue during EPF withdrawal. When one files their claim for the withdrawal of their EPF money, their claim will be checked with the details presented by the individual during the registration of EPF. If the details are incompatible, their claim will not be recognised. This will result in a lot of annoyances, as the person would have first to change their credentials in the EPFO unified portal and then apply for their EPF withdrawal again.

So, let us check out the common mistakes or errors that can deny your EPF withdrawal application:

• Any misspelled or incorrect data entry during the original registration can lead to the rejection of the EPF amount withdrawal application.
• The member should present the nominee details. Nonexistence of nominee details can create troubles while appealing for EPF claims or lead to dismissal of claims application.
• The date of joining should be specified correctly in your EPF account. This data is essential as it helps assess your EPS pension and the total months and years of EPFO contribution.

These factors are vital in determining if the withdrawal amount is free of taxes or not.

Thus, an incorrect date can produce hassles while withdrawing the EPF amount.

Correction in the name after marriage happens mostly with women, who adopt the title or surname of their husband’s family after marriage. Sometimes people intend to change their titles and surname, even without marriage. If a person has done so, then the individual must let the new name reflect in their EPF account. It will avoid any disputes later during EPF withdrawal.

An individual can change their name in their EPF account by filling the authorised form and submitting it to EPFO. If an individual has already changed their name in their testimony documents or even their bank records, then they must change their name with EPFO at the most immediate.

With the help of the EPF name correction form, one must also provide a copy of their marriage certificate as evidence. However, if someone has not made any changes to their linked bank account, then they don’t have to modify the name in the EPF account. Their bank details and their EPF account details should match to promote an easy withdrawal.

This is the process to change the name in the PF account, both online as well as offline, easily. You can follow either the online process or the offline process and submit the form of EPF name correction with the Regional PF commissioner.