Provident fund is one of the most beneficial and popular investment tools introduced by the government for salaried individuals both in public sector and private sector. Provident Fund is a pool of funds that is created by saving a small percentage of your salary every month and deposited with Employees Provident Fund Organization of India. These contributions made by individuals attract compounding interest on a yearly basis. It is mandatory for all companies in India who employ 20 or more employees to be registered with Employees Provident Fund Organization.
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Calculation of Provident Fund on Salary
Provident Fund is created to propagate the idea of saving a fraction of salary for financial security and stability. An individual can start his contributions to Provident Fund once he starts working at any establishment as an employee. These Provident Fund contributions as a fraction of the salary are made on a monthly basis. The PF corpus that is collected can later be used by the individuals in the event of retirement or if an individual is no longer fit to work.
Let us now understand how the Provident Fund is calculated on salary. The two most important factors to be considered before understanding the calculations are as below-
- EPF account: EPF stands for employee provident fund. This is the provident fund account where the funds of contributions made by the employee and employer are pooled.
- EPS account: EPS stands for Employee Pension Scheme. This is the account where the employer makes little contribution out of the total fraction that is supposed to be contributed by the employer.
The fraction of provident fund that is deducted from the salary is 12%. This means that both the employer and employee respectively contribute 12% to the Provident Fund account. It is important to note that the employee contributes the entire 12% of his salary to the EPF account while the employer contributes only 3.67% to the employee’s EPF account and the remaining of 8.33% is contributed to your EPS account by your employer. Thus employers’ total contribution of 12%, and is split into two parts- 3.67% goes to the employees provident fund account while the remaining 8.33% to the employee pension scheme account.
Documents Required for EPF Transfer
Before applying for PF transfer, employees must keep a check on the following-
- Activated UAN on the EPF portal
- Seeded bank details including Bank account number and IFSC code
- Bank details should be verified by the employer
- Aadhaar should be seeded in the UAN account
- e-KYC should be approved by the employer
- Date of Joining, Date of Leaving and the reason for leaving the job should be mentioned on the portal
- EPFO accepts only one transfer request against one member id
- Authorised signatories of the previous and current employers should be digitally registered in EPFO
- PF account number of both the previous and current jobs should be entered in the EPFO database
- Form 13 required for automatic transfer of EPF
How to Download Form in PDF
You can download the PF Transfer Form 13 from the link below:
Steps for PF Transfer Online
- Before initiating the online process for transfer of Provident Fund from previous employer to current employer, it is imperative on the part of both your previous and current organizations to have their digital signatures registered with EPFO for the purpose of verification and attestation of all documents
- Even if any one of your previous or current employers has a digital signature, then the transfer of your fund online can be carried out
- For knowing whether your employer is registered with EPFO or not, you can quickly identify it by running eligibility check of your employer on www.epfindia.gov.in
- After running the eligibility check, register yourself as a member on the portal
- Now, fill EPF transfer claim form
- While filling EPF transfer Claim form, you will need the following information-
- EPF account numbers of both the employers
- Details like the Date of Joining and Resignation Date of previous employment
- Date of joining with the current employer
- Bank details like account number, bank name, bank branch and IFSC code. These details are required in case you wish to withdraw your money
- After punching in the EPF account number of the previous employer, the EPFO will automatically fill the name of your previous employer and give the details of the regional provident fund office that maintains the account of your previous employer
- In order to validate the authenticity of the person carrying out the online transfer, the EPFO asks you to enter date of birth of the employee. If you enter wrong details for 3 times then the EPFO will block you and you will not be able to carry of online transfer of Provident Fund
- After filling of the EPF Transfer Claim form, select either of the employers to verify and attest your forms. Note that if the attestation is done by the previous employer, then the process of transfer of PF would be fast paced
- After selecting the employee, take a print out of the form and submit the same with the employer you chose for attestation
- On the next page, you can review and submit the complete form
- After the final submission, take a print out of the form, sign it and submit it to the employer for their record. Submission of the form should be done within 15 days to avoid rejection of the transfer claim by the employer
The above method is quick, efficient and works fast if the employer is efficient in managing the transfer request and does not have apprehension towards transparency of the process.
Ways to Transfer EPF Balance
The EPFO has introduced new methods to expedite the process but have not yet closed the existing way of transferring PF. Members can choose either of the following ways to transfer their EPF balance:
Offline Channel for PF Transfer
- In the offline channel of EPF transfer, the member is required to fill in the printed form (form 13) in a detailed manner and submit it to the current employer
- Present employer forwards and submits the same to EPF office. EPF office sends the form to the applicant’s previous employer for verification and attestation
- On the receipt of verified and attested copy from the previous employer, the EPF office transfers the balance from previous EPF account to a new EPF account
- In the offline method of PF transfer, the applicant does not need to furnish UAN and Aadhaar card number
- UAN (Universal Account Number) is allotted by EPFO and it acts as a single identification number for multiple employee IDs allotted to the same individual
Options in Online Transfer of PF Transfer
There are three ways in which you can transfer your PF balance online-
- Online Transfer Claim Portal (OTCP): The Online Transfer Claim Portal does not require UAN or Aadhaar Card or any other documents. The process mentioned above is through the Online Transfer Claim Portal.y
- One Employee, One EPF account: One Employee, One EPF account was introduced to get rid of confusion in the multiple data of same individual members with EPFO. With ‘One Employee, One EPF account’, EPFO aims to merge all the multiple existing EPF accounts of the member and bring them under one umbrella. This is achieved by allowing the members to apply for more than one EPF transfers.
- The Automatic EPF balance Transfer: This method of EPF transfer is applicable where the transfer of PF is to be done from relatively new EPF account as this method requires UAN number, which is easily provided with the new accounts. In this method, the applicant does not have to explicitly do anything for transfer of PF. It gets transferred as soon as the UAN is punched into the system by the new employer.
EPF Transfer Status
The online submission of application of PF transfer enables the employees to easily track the status of the application, unlike physical application.
Online status can either be checked by logging into the Online Transfer Claim portal or by visiting ‘EPF Claim status check’ page available on the EPFO website. If the applicant is not happy with the service and is unsatisfied with the status, he/she can use EPF Grievance Portal to know the exact status of the transfer claim.
Benefits of Provident Fund
Provident Fund was initiated by the Government of the country to motivate the employees to invest. In addition to saving money for retirement, Provident Fund has multiple other benefits as well:
- Investments in PF account ensure growth of money in the form of compounded interest
- Having a PF account exempts the employees from tax payment on the interest earned
- Withdrawals from PF account are not liable for any tax payments after 5 years of continuous service
- Employees are granted the facility of pre-withdrawal from the PF corpus under certain situations
- Employees are eligible for lifelong pension under the Employees’ Pension Scheme 1995
- Members of the PF account are also offered multiple insurance benefits under the Employees Deposit Linked Insurance scheme- an insurance cover provided by the EPFO
Q1. How to download PF transfer form?
You can download the PF transfer form here.
Q2. What is Form 13 for provident fund transfer?
Form 13 is required to be filled in by employees willing to transfer their PF accounts online.
Q3. If Form 13 mandatory for PF transfer?
Yes. Form 13 is mandatory for the transfer of PF from one account to another.
Q4. How many days does it take for PF to transfer?
Online application of PF transfer takes about 20 days.
Q5. How can I transfer PF from one account to another?
You can transfer your PF from one account to another using the following online methods-
- One Transfer, One Claim Portal
- One Employee, One Account
- Automatic EPF Transfer