Hi,
I had a PF account with my first company 14 years ago. Now it shows as an inoperative account when I checked for the status online. I have a new PF account with my recent employer whom I left a few months ago. I left this new employer just 3 months short of 5 years. I am not working anywhere now.
Now, if I withdraw PF from this new PF account, there'll be a tax deduction as I had not completed 5 years. To get around that and make up for the 3 months, can I transfer my old PF account to this latest one so that I will fulfill the mandatory 5 years of employment?
Please advise.
Thanks and Regards,
Woodcutter
From India, Thane
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I had a PF account with my first company 14 years ago. Now it shows as an inoperative account when I checked for the status online. I have a new PF account with my recent employer whom I left a few months ago. I left this new employer just 3 months short of 5 years. I am not working anywhere now.
Now, if I withdraw PF from this new PF account, there'll be a tax deduction as I had not completed 5 years. To get around that and make up for the 3 months, can I transfer my old PF account to this latest one so that I will fulfill the mandatory 5 years of employment?
Please advise.
Thanks and Regards,
Woodcutter
From India, Thane
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Hi,
You can request the same transfer through Form-13. The RPFC does not deduct tax; however, if your company has an in-house PF, i.e., a PF trust, then they will deduct tax. To initiate the fund transfer, you need to attach ID proofs and some supporting documents for that company.
Regards,
Deepak
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2You can request the same transfer through Form-13. The RPFC does not deduct tax; however, if your company has an in-house PF, i.e., a PF trust, then they will deduct tax. To initiate the fund transfer, you need to attach ID proofs and some supporting documents for that company.
Regards,
Deepak
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Hi Deepak Sir,
Thank you so much for your help! I am reaching out to you again just to clarify my situation.
My recent company does not have a PF trust of its own. It regularly deposited the PF amount with RPFC only. I left this company in December 2012. To be eligible for tax deduction on the new PF amount withdrawal (excluding the previous deposits made 14 years ago by my first employer), I should have completed 5 continuous years of service, which I have not. There is a shortfall of 3 months.
My first company also deposited the PF amount with RPFC only. Since I have already left my recent employer and I am not currently working with a new employer, am I still allowed to transfer my old PF account to this new one just to technically meet the mandatory rule of a minimum of 5 years of PF deposits?
Regards,
Woodcutter
From India, Thane
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Thank you so much for your help! I am reaching out to you again just to clarify my situation.
My recent company does not have a PF trust of its own. It regularly deposited the PF amount with RPFC only. I left this company in December 2012. To be eligible for tax deduction on the new PF amount withdrawal (excluding the previous deposits made 14 years ago by my first employer), I should have completed 5 continuous years of service, which I have not. There is a shortfall of 3 months.
My first company also deposited the PF amount with RPFC only. Since I have already left my recent employer and I am not currently working with a new employer, am I still allowed to transfer my old PF account to this new one just to technically meet the mandatory rule of a minimum of 5 years of PF deposits?
Regards,
Woodcutter
From India, Thane
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Hi Deepak Sir,
I would like to add a little more here as to why I had to leave my recent company. My recent employer thought it's of no use to keep me on the bench without a project, and hence asked me to resign with the assurance that I would receive 3 months' pay even if I left the same day. So, I complied. Subsequently, as promised, my recent employer provided full and final settlement for the next 3 months. However, I don't believe the employer deposited my PF amount with the RPFC for the next 3 months. Had this been done, I would have technically completed 5 years of continuous service and would be eligible for tax deduction on PF withdrawal.
Kindly advise.
Regards,
Woodcutter
From India, Thane
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I would like to add a little more here as to why I had to leave my recent company. My recent employer thought it's of no use to keep me on the bench without a project, and hence asked me to resign with the assurance that I would receive 3 months' pay even if I left the same day. So, I complied. Subsequently, as promised, my recent employer provided full and final settlement for the next 3 months. However, I don't believe the employer deposited my PF amount with the RPFC for the next 3 months. Had this been done, I would have technically completed 5 years of continuous service and would be eligible for tax deduction on PF withdrawal.
Kindly advise.
Regards,
Woodcutter
From India, Thane
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Dear Woodcutter,
Yes, you will very soon able to the get the facility of online transfer of PF accounts and consolidate them.The Employees’ Provident Fund Organization (EPFO) has been contemplating from time to time to improve the services available to the PF subscribers. Sh K K Jalan,who have recently taken over as Central Provident Fund Commissioner, has assured that his organization will very soon facilitate on line transfer and consolidation of PF accounts of the PF members.
I am attaching a newspaper clipping appeared in Mint dated July 5, 2013 for the information of the members.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Yes, you will very soon able to the get the facility of online transfer of PF accounts and consolidate them.The Employees’ Provident Fund Organization (EPFO) has been contemplating from time to time to improve the services available to the PF subscribers. Sh K K Jalan,who have recently taken over as Central Provident Fund Commissioner, has assured that his organization will very soon facilitate on line transfer and consolidation of PF accounts of the PF members.
I am attaching a newspaper clipping appeared in Mint dated July 5, 2013 for the information of the members.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Dear BS Kalsi sir,
Thank you for your help! I have a doubt though. I also read the attachment you provided. To transfer an old PF account to a new one, the member should initiate the process through either the current employer or the previous employer. However, in my case, both are previous employers. Will they still show interest in processing my transfer request? Is it allowed in this situation? Or should I join a new company now to ensure both of these PF accounts get transferred to the future one?
Kindly advise.
Regards,
Woodcuttera
From India, Thane
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Thank you for your help! I have a doubt though. I also read the attachment you provided. To transfer an old PF account to a new one, the member should initiate the process through either the current employer or the previous employer. However, in my case, both are previous employers. Will they still show interest in processing my transfer request? Is it allowed in this situation? Or should I join a new company now to ensure both of these PF accounts get transferred to the future one?
Kindly advise.
Regards,
Woodcuttera
From India, Thane
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Dear Woodcuttera,
I do not know why you have expressed your doubt as to whether previous employers would show any interest in processing your transfer request. I suggest to you to wait for a couple of days so that the EPF Deptt. issue the detailed instructions to all the concerned persons. Once these instructions are issued, the employers who are registered with EPFO will be duty-bound to follow the orders. You should not have any doubt because nowadays we have a number of channels to register our complaints for their redressal.
If you are not working anywhere, you can apply for its withdrawal through your previous employers directly. I do not understand why you have mentioned that tax deduction is available to the members only after completing 5 years of employment. I have no knowledge of such provisions existing in the EPF Act. As far as my knowledge goes, there is no income tax on the withdrawal of PF. I only know that to be eligible for a pension, one should complete ten years of continuous service.
I would request seniors to correct me if I am wrong.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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I do not know why you have expressed your doubt as to whether previous employers would show any interest in processing your transfer request. I suggest to you to wait for a couple of days so that the EPF Deptt. issue the detailed instructions to all the concerned persons. Once these instructions are issued, the employers who are registered with EPFO will be duty-bound to follow the orders. You should not have any doubt because nowadays we have a number of channels to register our complaints for their redressal.
If you are not working anywhere, you can apply for its withdrawal through your previous employers directly. I do not understand why you have mentioned that tax deduction is available to the members only after completing 5 years of employment. I have no knowledge of such provisions existing in the EPF Act. As far as my knowledge goes, there is no income tax on the withdrawal of PF. I only know that to be eligible for a pension, one should complete ten years of continuous service.
I would request seniors to correct me if I am wrong.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Dear Sir,
There is a provision in the Income Tax Act which requests the individual to pay tax on PF withdrawal if they have not completed 5 years of service. For sure, the PF department will not do TDS deduction as it is the liability of the individual to pay tax. So, if you have not merged the PF of the previous service before withdrawal, then you are liable to pay tax. I am not sure how you will merge both the PFs if you are not working. Some seniors in this group have to help you in this activity.
Regards, Ramesh G
From India, Chennai
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There is a provision in the Income Tax Act which requests the individual to pay tax on PF withdrawal if they have not completed 5 years of service. For sure, the PF department will not do TDS deduction as it is the liability of the individual to pay tax. So, if you have not merged the PF of the previous service before withdrawal, then you are liable to pay tax. I am not sure how you will merge both the PFs if you are not working. Some seniors in this group have to help you in this activity.
Regards, Ramesh G
From India, Chennai
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Dear Ramesh G,
I am grateful to you for correcting me and educating me on the provisions of income tax applicable for the withdrawal of PF before completion of 5 years. I have checked up the provisions existing in the Income Tax Act, 1961.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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I am grateful to you for correcting me and educating me on the provisions of income tax applicable for the withdrawal of PF before completion of 5 years. I have checked up the provisions existing in the Income Tax Act, 1961.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Dear Kalsi sir and Ramesh sir,
Thank you so much for your timely help in clarifying my doubts! I just checked with the PF department, and they will not deduct any tax. I don't think I have to include my PF withdrawal money in my IT filing. So I will withdraw now.
Thank you so much again.
Regards,
Woodcutter
From India, Thane
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Thank you so much for your timely help in clarifying my doubts! I just checked with the PF department, and they will not deduct any tax. I don't think I have to include my PF withdrawal money in my IT filing. So I will withdraw now.
Thank you so much again.
Regards,
Woodcutter
From India, Thane
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Notification on Amendment to in-operative account.pdf