I’ve served three employers (together with my present one) since 2015 with no hole in employment. Recently, I transferred my provident fund (PF) corpus from employer 1 to 2 after which from employer 2 to three.
Can I declare advance withdrawal? Will the Employees’ Provident Fund Organisation think about the overall size of employment as 5 years as the primary contribution was achieved in 2015 by employer 1? Do they calculate/embrace the size of employment for all earlier employers? Do they think about the age of UAN (Universal Account Number) creation?
—Name withheld on request
Your whole interval of service can be thought of for computing the continual interval of service. In your case, as there is no such thing as a break in employment throughout a number of employers and it exceeds the required employed interval of 5 years, your PF corpus is taken into account as tax-free, and you’ll withdraw the cash topic to the situations and goal outlined by the PF Act.
I’ve two totally different passbooks below one UAN. Will the curiosity on the earlier passbook grow to be taxable since I’ve switched to a unique firm? Also, am I lacking the prospect to earn extra compound curiosity since I haven’t merged each accounts?
—Rahul Raj
You want to make sure that you merge the earlier EPF account with the brand new account. This merger can be achieved in the identical UAN mapped with the present EPF account.
This is to be achieved if you are in lively employment. As in if you happen to redeem the primary EPF and your steady interval of service is lower than 5 years then the mentioned quantity can be taxable. And when you merge, the earlier EPF can be included for the aim of steady service and whole service of 5 years to find out the taxation i.e., if mixed service exceeds 5 years, then the proceeds are exempt from tax.
Surya Bhatia is managing companion of Asset Managers.
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