.png){kind=logo}
Changing jobs often leads to multiple PF accounts. Learn why merging PF accounts online is crucial for service continuity and tax-free withdrawals.
PF withdrawal isn’t always tax-free. Understand the five-year rule, TDS implications, and how early withdrawals can impact your final payout.
Digital EPFO services make merging PF accounts simple. Discover how proper consolidation helps avoid delays, tax issues, and lost benefits.
With job mobility becoming a top trend across sectors, many salaried employees find themselves managing multiple Provident Fund (PF) accounts. While transferring PF is now possible with the Universal Account Number (UAN), a fragmented PF balance is still one of the most common issues to deal with. Often this leads to delayed transfers, incomplete onboarding, or multiple UANs being generated.
To address these issues, merging PF accounts online is crucial. This merger ensures that retirement savings are all in one place. If you’re dealing with multiple PF accounts and looking for a way to merge them, this article lists all the details, along with whether PF withdrawal is taxable or not.
In the modern competitive job market, employees often change organisations several times during their careers. If the previous PF balances don’t get transferred, individuals may end up with multiple inactive PF accounts. Each of them will earn interest separately, but the complexity will increase.
Merging PF accounts under one active UAN ensures that all the contributions, including employee share, employer share and interest rates, reflect in a single account. This is especially important because when one tries to withdraw the amount, EPFO considers total continuous service across employers as the eligibility criterion.
The merging process isn’t extremely complicated; instead, the EPFO allows PF accounts to merge through its member portal. However, employees need to ensure that their UAN is active and Aadhaar, PAN and bank details are all verified. Once you log in, you can submit a transfer request by selecting previous employer details and authenticate it using an OTP.
Here’s the summary of the process. Follow the below steps for merging to PF accounts online:
Make sure the UAN is active
Confirm whether your Aadhaar, PAN and bank details are verified.
Log in to the account and select PF transfer
Enter previous employer details
Authenticate the request via OTP.
Within a week, EPFO processes all the requests and users will get the entire balance in one account.
If you have multiple UANs, EPFO permits you to deactivate older ones and use only the latest active one for the merged account. Deactivating UAN is necessary to prevent delays in future withdrawals and compliance issues.
Now, if the confusion is whether PF withdrawal is taxable or not, the answer primarily depends on the duration of continuous service and the reason for withdrawal.
If an employee completes five years or more of continuous service, PF withdrawal is completely tax-free, including the employee’s contribution, the employer’s contribution, and interest earned. Now, if you are confused about continuous service, it includes working across multiple organizations, provided PF accounts are merged correctly.
If withdrawals are made before five years, this often attracts tax. In these cases, the employer contribution and interest are added to taxable income. Even the interest on the employee’s contribution also becomes taxable if Section 80C benefits are previously claimed.
Additionally, before five years, if the withdrawal amount exceeds Rs. 50,000, it will be subject to TDS. The PAN should be linked to the account, and 10% TDS will be deducted. If somehow you don’t have your PAN linked to your PF account, a higher TDS rate may apply. However, employees can settle the tax at the time of filing tax returns.
There are certain exceptions as well. If the withdrawal is due to a medical emergency, employer closure, or involuntary job loss, the tax policy won’t apply, even if it’s not five years of continuous service.
Also Read: How to Fix Wrong Member ID Linked to Your UAN: Complete Guide
Employees should proactively monitor their PF accounts whenever they change jobs. Continuous monitoring ensures that PF balances are transferred and merged every time you switch to a new job. This merger helps maintain continuity of service, which is critical for tax-free withdrawals.
Before initiating a PF withdrawal, employees must assess whether they have met the five-year service condition and understand the tax implications involved. However, it is always recommended to avoid premature withdrawal of PF funds and keep them intact until retirement. The PF amount significantly supports long-term financial security.
1. How can I check if I have multiple PF accounts?
Ans: You can log in to the EPFO member portal using your UAN to view linked PF accounts and employment history.
2. Can PF accounts from different employers be merged online?
Ans: Yes, PF accounts from multiple employers can be merged online through the EPFO portal using Form 13.
3. Is PF withdrawal after resignation taxable?
Ans: PF withdrawal after resignation is tax-free only if five years of continuous service are completed.
4. What happens if I withdraw PF before five years?
Ans: Early withdrawal may be subject to tax and TDS, depending on the amount and whether the PAN is linked.
5. Does merging PF accounts affect interest earnings?
Ans: No, merging PF accounts does not reduce interest. It ensures that all balances earn interest in a single account.
