The usage of Universal Account Number by the EPFO has helped the agency avoid any redundancy that would come up due to multiple accounts for one subscriber when they switch employers. Accounts are dormant in case of no activity for 36 months.
The recent rolling out of the Universal Account Number (UAN) by the Employees’ Provident Fund Organization (EPFO) has made it possible for the agency to avoid the redundancy arising out of multiple accounts per subscriber as and when they change their employer. The UAN is quite new and there are still lots of subscribers who have their older EPF accounts lying dormant due to inactivity. For these depositors, the issue of withdrawal of funds may sound like a huge task, but it is quite easy to get the funds back.
Dormant EPF accounts
Dormant accounts are those that haven’t seen a contribution in over 36 months. In general, accounts get dormant when the member hasn’t transferred the old account to his new employer and tends to forget about the previous contributions. This hard earned money will keep earning interest in the original account, however the government recently released a notification saying that unclaimed EPF funds lying in dormant accounts are likely to be absorbed in the senior citizens’ fund.
In such a scenario, the EPFO this year established a help desk to help members track their dormant accounts and make claims towards the funds in them. The helpdesk will help you out in locating the account if there is a lack of required information on your part. This step is aimed at enabling members to receive unclaimed funds, while streamlining the move to UAN for existing members.
What are my options for the EPF funds?
You have 2 options for the unclaimed funds. You may either choose to withdraw the funds or transfer them to your current or existing EPF account. The transfer option is ideal for all subscribers whose EPF account in question is less than 5 years old. This is because the proceeds from a PF account if withdrawn within 5 years of setting up the account, will attract taxes in the form of TDS. The transfer option is most relevant to the salaried class who can manage without the immediate need for liquidity. Also, once the UAN number is received, the process for making claims will become much easier and hassle free, and you can choose to do so anytime in the future instead of withdrawing funds right now.
If however, you are a self-employed member or are planning to start something new for yourself, you may need of immediate funds and the withdrawal option will be ideal for you. If your account is already older than 5 years then there’s no taxes to be deducted on the proceeds.