Can you transfer EPF account from unexempted trust to EPFO, exempted trust? However, what if you have an EPF account with unexempted trusts? Does EPF scheme rules allow an EPF member to transfer the unexempted trusts to EPFO or exempted trusts? Read on to know about it
While switching jobs, members of the Employees' Provident Fund (EPF) must transfer their EPF accounts from the previous employer to the new employer to ensure they can continue building retirement corpus, get pension and be eligible for partial withdrawals from EPF and continue to be eligible for other related benefits.It is not too difficult to do this nowadays if the employer maintains EPF accounts either with the Employees' Provident Fund Organisation (EPFO) or in an exempted trust. Transfer requests can be submitted online on the Member e-Sewa portal - irrespective of whether the transfer is happening within EPFO or from EPFO to an exempted trust or vice versa.
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However, what if your old employer was putting the PF money in an unexempted trust? Can you still transfer your EPF account with an unexempted trust to EPFO or an exempted trust?
These questions can assume importance as an unexempted EPF trust is not recognised by EPFO or the Income Tax department. Further, an individual cannot get Section 80C and other tax benefits on EPF contributions made to an unexempted EPF trust.
Sanket Jain, Partner, Pioneer Legal, says, "The EPF scheme rules allow an EPF member to transfer his/her account from old employer to new one irrespective of whether the account is held with the EPFO, exempted trust or unexempted trust. However, the process of transferring an EPF account from EPFO to exempted trust or vice versa is easier. On the other hand, transferring PF accounts or balances from an unexempted EPF trust to EPFO or an exempted trust typically involves verification of paperwork and coordination between different entities."
How to transfer EPF account from unexempted trust
Saraswathi Kasturirangan, Partner, Deloitte India, says, "Unlike transfer of EPF balance from an exempted PF trust to EPFO or vice versa, where the process is online, transfer of PF accounts and balances from an unexempted EPF trust to EPFO or exempted trust is an offline process."To transfer the balance from an unexempted EPF trust, the employee has to first submit Form 13 for PF transfer to the new employer. Then the employee has to approach the old employer, who is running the unexempted trust, to ensure that the transfer request that the new employer would raise is approved, explains Saraswathi Kasturirangan. "Thereafter, such unexempted trust would generate Annexure-K and process the transfer and forward the funds to the EPFO or an exempted trust."
How long does it take to transfer EPF account?
The transfer of an EPF account out of an unexempted trust is an offline process. So, it will take more time than what can be usually expected in an online transfer.
Jain says, "It's essential for employees to follow up with their new employer and the EPF office to ensure a smooth transfer. The timelines for completing the transfer may vary depending on various factors such as the workload of the EPF office and the efficiency of communication between the different parties involved."
Once the transfer process is complete, the PF balance will be transferred to the EPF account created by the new employer.
Saraswathi Kasturirangan says, " Unlike PF, the pension accounts (EPS account) of unexempted trusts are typically maintained with the EPFO by most organisations. On transfer of EPF and EPS accounts from unexempted trusts, the pension account service history is updated in EPFO's records."
This story originally appeared on: India Times - Author:Faqs of Insurances
