• Tax benefits

  – Apart from the fact that an employee’s contribution towards an EPF account is eligible for tax exemption under Section 80C, the interest rate earned is exempt from income tax. According to experts, your EPF account continues to earn interest even if it has been lying dormant for more than 3 years. Also, EPF withdrawals are not taxable after five years of continuous service, unless the employer terminates his/her business or the employee voluntarily quits his/her job.If you interested in saving more tax and need best options on investment with high returns than check this link for Top Investment Options

• Lifelong pension

  – While employers and employees both contribute 12% of wages in EPF, 8.33% of the business’ offer is redirected towards the Employees’ Pension Scheme (EPS). As per the retirement subsidize body, 10 years of contributory participation guarantees deep rooted annuity under Employees’ Pension Scheme 1995.

• Insurance benefit

  – There are the advantages guaranteed under the Employees Deposit Linked Insurance (EDLI) Scheme, which is a protection spread gave by the EPFO. The enlisted candidate will get a singular amount installment in case of the demise of the individual protected, during the time of the administration.

• Premature withdrawal option

  – Although the money parked in your EPF account is for your retirement only but partial early withdrawal from EPF is now permitted for different reasons like marriage, higher education and making a down payment for a house.

– One can withdraw the complete amount if he/she is unemployed for  more than 2 months.

• Higher returns

  – The EPFO contributes 5-15% of its investible stores in return exchanged assets (ETFs). Besides, 45-half of the PF kitty must be put resources into government protections, 35-45 percent in the red instruments and 5% each in currency advertise instruments and framework trusts. Notwithstanding, the EPFO has been chipping away at a product that would help show retirement reserve funds in real money and ETF parts independently. The following enormous jump from that point give individuals a choice to increment or abatement interests in stocks according to singular hazard craving. Actually, the EPFO’s pinnacle dynamic body, the Central Board of Trustees, has just proposed investigating such conceivable outcomes.

Every employee of a company is entitled to a PF account; however, the trouble starts when the same employee is leaving his job for better opportunities. There was a time when a person moving to another job had to write a letter or send an email to the HR dept. of the previous company to release the PF amount.

There was a stipulated period after which the PF would be released and a cheque handed over or sent by post to the employee. Once joining another company, a new PF account will be created in the name of the employee. The cycle continued again if the employee again decides to quit the job after sometime.

Things have changed now, on October 1^st, 2014, the Prime Minister of India, Narendra Modi announced what was indeed a revolutionary move – The Universal Account Number (UAN).

Below is the simple online process for PF transfer or merger:

• First open this epfo link https://unifiedportal-mem.epfindia.gov.in/memberinterface/
• Login by using your UAN and password.
• Once login, click on ‘Online Services’ tab and then select ‘One Member – One EPF Account (Transfer Request)’.
• Check your personal information and details of present PF account.
• Click on ‘Get details’ button to get the details of previous PF account.
• There will be the option of choosing either your previous employer or current employer for attesting the claim form based on the availability of authorized signatory holding DSC. Choose either of the employers and provide member id/UAN.
• Last step is to click on ‘Get OTP’ to receive OTP to UAN registered mobile number and then enter the OTP and click submit button.

• Tax is deducted at source on EPF corpus if the cash is withdrawn without any valid reason(such as medical emergency, house purchase or construction, and higher education) before completion of 5 years of continuous service. All withdrawals made before completion of 5 years of continuous service are subject to tax. So a merger of past PF accounts will expand the time of service and could help in getting away from the tax.
• Merging or transferring previous PF account into current PF account gives the advantage of compounding of corpus. So the compounding effect will work on the total amount(old PF amount + current PF amount) which will definitely create a good amount of money in future through the interest provided by the EPFO.
• Merging of PF accounts ensures that the past services does not get lapsed and continues to get added in the subsequent employment. So if the total service period of an employee reaches 10 years then the employee becomes eligible for pension benefits.
• Earlier the EPFO decided to stop paying interest on accounts which are inactive for more than 3 years but later it rolled back this decision.So it is better to merge old accounts into new one because EPFO policy can be changed again and the organisation might stop paying interest to inactive accounts.