POSTED BY April 16, 2012 6:48 pm COMMENTS (8)ON
Coming down to the point directly.
I am a lawyer by profession. I am working with an IT company in bangalore for 18 months now.
I am leaving this (IT company) job and am going to join a Law Firm from next month.
There will be a change in my status as a taxpayer with this new changed job profile.
I am going to be a RETAINER from Salaried Employee (i.e,. my existing status).
I do not want to use my PF amount as of now but I am not sure how can I continue contributing. PLEASE NOTE: My new employer will not pay me for my PF (most probably) since they won’t treat me as my IT company did (i.e., as a salaried employee).
Please let me know your thoughts on my possible modus operandi henceforth. Thanks in advance.
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8 replies on this article “PF withdrawl in case of change of my Paying Capacity (from Employee to Retainer)”
Hey Thanks everyone. Your response has really been quite helpful.
Appreciate your time.
Your finance team should be able to help you in this regard. Some companies do not allow closure of PF account (my experience in previous companies). check http://www.epfindia.com for information on forms/closure of account etc. One more thing to bear in mind is if the PF account is transferred to another company, you will get credit for the number of months the old PF account is active and which will be considered in case of withdrawals for house construction, home loan payment, marriage etc. If you close the account and later on open another PF account it will start off as a fresh account.
PF account will not earn interest if there is no credit for 3 continuous years. You will earn interest on the existing amount for the next 3 years. If after close to 3 years, you do not see chances of getting PF, you should close the account and move the money to PPF account. BTW, PPF account is giving more interest this year than PF account. since you worked for only 18 months, the amount in my opinion would not be more than a lakh. You could consider closing the PF account and transferring it to a PPF account.
I think I will withdraw my PF and trasfer it to a PPF account.
Can you also inform me about the process that I need to initiate while staying in my present job (IT Company).
Any additional information as to formalities regarding filling of a particular form etc. would be very helpful and is more than welcome.
Dear Prashant, please visit the below link & download the form 19 to withdraw your money.
Dear Prashant, as you are not in an employee – employer relationship, you can’t invest directly into your PF account. Please keep it as it is. Later on if you change your current job & comes back in to an employee – employer structure, you may transfer this old amount to your new PF account. If you do not have intentions to switch in next 5-7 years, you may redeem the amount & reinvest the same for your retirement on your own in other alternatives.
Thanks Ashal, it was quite helpful. Can you also tell me if I decide to withdraw my PF amount, what would be the role of my present employer (IT Employer) in facilitating the same.
My concern is that once I leave the job, it should not be a hassle as an ex-employee to get the PF processed, else I will do all those formalities now itself (before my notice pd. is over).
It doesn’t matter if you are an ex-employee when it comes to PF withdrawal. Have a read of http://insight.banyanfa.com/?p=212 which details on PF related queries.
As Ashal as suggested, I would also recommend you to hold on to your PF for 3 more years. Your PF account will continue to receive tax free interest for 3 years after the last date when any contributions were made on the account. You can not make a PF contribution if you leave employment or your new employer doesn’t support the PF scheme.
If after 3 years you still don’t intend to join an employer which supports a PF scheme, then you should withdraw your PF.