Should I Transfer My PF to a New Employer or Withdraw It? Seeking Advice for 4 Years of Service

Dear Seniors,

Is it advisable to transfer the PF amount from the old employer to the new employer? If yes, what is the procedure and points to be taken care of while doing so? The total working years in this case are 4 years and 11 months.

Thanks in advance for your help.

Regards,
Pratik

Tax aspect during withdrawal needs to be kept in mind. Keeping funds in PF will increase your corpus on which one gets tax-free compound interest. By withdrawal of an amount, one loses the power of compound interest. I would strongly advise no withdrawal of PF; obtain a UAN and keep accumulations in the fund for the longest period of time possible.

PF Withdrawal
You have money for immediate disposal. You can buy a nice bike, cover expenses, get married, and save for future benefits. You can also start a small business. Having some amount in hand will help you plan accordingly for immediate medical expenses of elders/parents, fees for your siblings, and other needs.

PF Transfer
Your money will accumulate over many years, providing pension benefits after 10 years of service. Upon reaching 58, you will receive a pension and lump sum. Disability pension is available in case of an accident. The scheme includes insurance, ensuring protection for your spouse during and after service. Pension for nominees is also available. You can withdraw for building a house/home loan if necessary. The benefits are cumulative.

Both options are in your hands.

Best of luck...

Dear Prateek,

Greetings for the day.

It is better to initiate an accumulation transfer, as withdrawals will attract TDS liability.

Thanks & Regards,

Sumit Kumar Saxena

Actually, you do not have a choice. The law requires you to transfer your PF from the previous employer to the new one. You can withdraw only if you are no longer working. The current procedure has the concept of a unique ID, which means that your PF number will remain the same irrespective of whether you are changing your job. If you do not have the unique number, then you need to go online to the PF portal and initiate the transfer.

Transferring the PF amount from the old employer is more beneficial because once the money is withdrawn, it would be exhausted. Furthermore, the investment benefit is not as much as the PF department is offering.

It is a very easy way to get the same transferred. Just fill out the Form 13 and submit it to your present employer for necessary proceedings. Additionally, there is provision for getting a pension for the person who has been a regular contributor to PF for at least 10 years, even if it is with different companies.