Provident Fund The Retirement Benefit is applicable only if employees transfer their PF from one company to another and

not withdraw it every time they quit a company. Benefits of Transferring a PF account:

1. Monthly Pension after retirement:

Both Employer and Employee Contribute towards the PF account but out of the 12% of employer contribution .!"% #oes to Provident Fund $%PF& and the balance of '. % #oes to Pension Fund $%P(&. )o avail pension benefit* the member should have completed !" years of continuous service or he + she should have attained the a#e of ,- years or more. )he member will receive the Pension amount on a monthly basis after attainin# the a#e of ,'. .our Pension eli#ibility does not #et a brea/ and ultimately helps you in the future. 0n case of %P(* if the service period is less than 1- years* you1ve option to either withdraw your corpus or #et it transferred by obtainin# a 2Scheme Certificate1. 3nce* the service period crosses 1- years* the withdrawal option ceases. .ou wll have funds for your future $defenitely a savin#s without our /nowlede&. Pension availability in your old a#e 4 which is defenitely an indirect investment

2.

)a5 %5emption on PF withdrawal: )he withdrawals are e5empt from ta5 if the concerned employee has rendered continuous service of more than , years. 3therwise* it would be ta5able at the applicable slab rates. . .ou earn ta5 free interest and your savin#s #o up. 0f you have not wor/ed for at least five years* but the PF has been transferred to the new employer* then too it is not ta5ed. )he tenure of employment with the new employer is included in computin# the total of five years. 0f you withdraw it before completion of five years* it is ta5ed.

6dvances from PF 6ccount: )he members are eli#ible to withdraw money as advances from their PF 6ccount for conditions as mentioned here below: #arriage: )he member should have completed at least " years of service $not necessarily with the same employer* but should have transferred the PF money from previous employers for consecutive period of " years& Education: )he member should have completed at least " years of service $not necessarily with the same employer* but should have transferred the PF monies from previous employers for consecutive period of " years& For Purchase of $ite and Construction: (hould have completed , years of services Purchase of Flat%&ouse : (hould have completed , years of services 'lteration % #odification of &ouse: (hould have completed , years of services Repayment of outstanding principal % (nt) of a loan obtained from $tate *ovt Regd Co+ operative $ociety $tate &ousing Board ,ationali-ed Ban. and Public Financial (nstitution : (hould have completed 1- years of services

,ote/ )he said advance is totally ta54free and interest4free. .our PF membership will be continuous if you have wor/ed for 1, years in different companies and each time you chan#ed companies and #ot your PF

transferred to the new company which /eeps your PF membership intact for 1, yrs. )his will help u to #et non refundable loans+advances $as mentioned above& from PF 7. (hould one withdraw or transfer %PF account8

9ith employer matchin# one1s contribution and a ta54free #uaranteed return of '.,%* %P( is attractive. 6s it is cut from salary before it is credited to our account* it becomes forced savin#s. 0e recommend you to transfer EPF account and not withdraw) :et ;ompoundin#* ei#hth wonder of world do it1s ma#ic.

,.

)a5 liability )here is not one but multiple ta5 aspects associated with PF. )he most important ta5 benefit of PF is that both the employer contribution* your PF contribution and associated interest on PF balances is ta5 free at the time of withdrawin# of PF. <owever this would be ta5 free only if the withdrawal from PF is on the followin# #rounds: 3n the death of employee. 3n permanent disability of employee. 0n case the business of the employer is disrupted. 3n the completion of , years service of continuous service of the employee. , years of continuous service does not mean that it should be from one employer only. For e5ample* if you have wor/ed for years in ;ompany 6 and left the employment to =oin ;ompany B and wor/ed there for another 2 years. 1n transfer of PF account from company ' to B* both of these services would be clubbed to#ether to identify that you have been in service for , years.

!. >ormant PF account
)his is the most common ways by which even after contributin# to your PF account you can loose upon a material amount of interest. 0f you do not contribute to your PF account for more than years* your PF account becomes inactive and will not be provided interest. )his rule has been implemented from 1 6pril 2-11. .ou may be wonderin# that if you are wor/in# as an employee in 0ndia* then it is mandatory for you to contribute to your PF. <ence till you are wor/in#* you would be contributin# to your PF and hence your PF account should not become dormant. <owever* this is valid only for your current PF account ? the one into which your current employer @ you are contributin# into. 0f you have other PF account from previous employers* you will not be contributin# to those PF accounts. Anless you transfer those PF accounts into your current PF account* all e5cept your current PF account will become dormant after ! months from the date of last contribution. &ence it is 2ER3 (#P1RT',T T&'T 314 TR',$FER 314R PRE2(14$ PF B'5',CE$ T1 314R C4RRE,T PF 'CC14,T) )his would prevent your previous PF accounts from becomin# inactive as well ma/e them administratively efficient to be mana#ed. ". Fi5ed >eposit ? <ow to benefit most out of them 0f you encash your PF balances in earlier sta#es* you will not be able to ta/e advanta#e of compoundin# and hence would loose upon the opportunity to allow your money to #row.

3ou might not get !""6 of your EPF money 0ma#ine your contribution B employer contribution has been total Cs *,-*--- till date. 3ut of this *,-*--- * suppose 2*,-*--- has #one in %PF * and rest 1*--*--- has #one in %P( $for pension& . Dow if you quit your =ob in !th year of employment and opt for withdrawal of your %PF money $%PF B %P( actually& * then do you thin/ you will #et total *,-*--- . D3 E )hats because you always #et 1--% of your %PF part* but for %P( there is separate rule . )here is somethin# called )able 2>1 * under which its mentioned how much you #et at the time of e5it from your =ob* there is a slab for each completed year and you #et n times of your last drawn salary $dependin# on the completed year of service& sub=ect to ma5imum to Cs !*,-- per month. (o if your salary in this case was Cs -*--- per month* still you will be #iven only !*,-- F !.7- G Cs 71*!--.

Dote that the table > is upto H yrs only* because if 1- yrs are crossed* then you are liable for pension.