Exempted Provident Fund 2026

There are two major reasons why exempted PF trusts are often viewed as more beneficial for both employers and employees: 

1. Lower administrative charges 

While regular EPF members pay a 1.1% administration charge, members of exempted PF trusts pay only 0.18% as an inspection charge. This reduced cost results in significant savings over time. 

1. Same or higher interest rate than EPFO 

Private PF trusts manage the PF contributions of a company’s employees, and they are required to provide at least the same interest rate declared by the EPFO and often offer a higher rate. This potential for higher returns is a key reason many companies choose to set up their own PF trust. 

Contribution Structure Under Exempted PF

Under an exempted PF trust, both the employer and employee contribute 12% of the employee’s salary to the Provident Fund, just as in the EPF system. However, out of the employer’s 12% contribution, 8.67% is diverted to the Employees’ Pension Scheme (EPS), which continues to be managed by the EPFO not by the exempted PF trust.  

Withdrawal Rules after job loss 

1. Up to 75% of your PF balance can be withdrawn after one month of unemployment. 

1. The remaining 25% can be withdrawn after two months if you remain unemployed. 

Pension Eligibility under EPS 

1. Pension benefits become available after the age of 58. 

1. The pension is paid under the Employees’ Pension Scheme (EPS) and is handled directly by the EPFO, not the exempted trust. 

Transfer Rules of Exempted PF When Changing Jobs 

• When moving from one exempted PF company to another, your entire PF balance can be transferred directly to the new exempted PF trust. 
• If moving to a non-exempted (regular EPF) employer, the PF balance gets transferred from the trust to the EPFO. 
• If you’re switching to unorganised sector or getting self-employed, you will be considered as unemployed. You may keep the PF balance or take it out after two months of unemployment. However, if the balance stays in the trust for too long, the interest earned on it may become taxable. 

EPFO Ratings of Exempted PF Trusts 

All the exempted PF trusts are given ratings by the EPFO based on the following criteria: 

1. Timely transfer of PF 

1. Proper and timely investment of funds 

1. Timely remittance of contributions 

1. Declaring interest at least equal to the EPFO rate 

1. Timely claim settlement 

1. Completion of audits 

Key Benefits of Exempted PF

• Firms that have exempted PF offers higher or similar interest rates than the EPF. 
• Exempted PF trusts provide better and fast services than the EPFO. 
• Less administration charges by exempted PF trusts than EPFO that is 0.18%. 
• Employees can claim deductions on their own PF contributions under Section 80C, up to the Rs.1.5 lakh limit. Both the employer’s contribution and the interest credited to the account remain tax-free when the employee completes five years of service. This makes exempted PF a tax-efficient savings option for long-term employees.  

Viewing the Balance of an Exempted PF Trust

Employees of exempted PF trusts are allotted a universal account number (UAN) just like regular EPF members, but they cannot see online details related to EPF account online. They cannot access the passbook from the EPFO portal. To know your PF balance or track monthly contributions, you will need to rely on your salary slips or reach out to your organisation’s HR or finance team, as they maintain and update these records internally. 

PF Transfer from Unexempted to Exempted 

Step 1: Visit the EPFO website and log in to the “Member e-Sewa (UAN) portal” using your UAN and password. 

Step 2: Before starting, make sure your KYC (Aadhaar, bank details, etc.) is updated and approved. 

Step 3:  Go to the “Online Services” section and select “One Member, One EPF Account (Transfer Request)” to initiate a transfer. 

Step 4: The portal will show your previous and current employment details. Makw sure all details are correct, including PF account numbers. 

Step 5: Choose whether your PF transfer request will be routed through your previous or your present employer. 

Step 6: Click “Get OTP” and you will receive it on the mobile number linked to your Aadhar. 

Step 7: Validate your identity after entering the OTP. 

After OTP validation, the PF transfer Claim gets submitted. It usually takes EPFO 5-15 working days to process the request. Once processed, the PF funds will get transferred from the previous unexempted account to the new exempted account or trust.