Benefits of having Aadhaar backed EPF UAN

Introduced in 2014, UAN or Universal Account Number was aimed at becoming a universal number of provident fund accounts belonging to government employees. The UAN allows employees to have access to their PF accounts online. Each employee is assigned a unique UAN which is linked to their EPF accounts. The Indian Government has been encouraging the working population to link their Aadhaar cards to all their accounts and transactions, as it makes it secure and hassle-free.

Best Account

Linking your Aadhar card with your EPF UAN is very simple and can be completed in just a few steps by visiting the official EPF website. The portal is open for use by the employees with PF accounts. The first step in linking your Aadhar to UAN is selecting the ‘UAN Member e-Seva’ tab and then entering the UAN and login password of your EPF account. The user is then required to go to the Profiles page and in the ‘Update KYC information’ section, enter the Aadhar details along with a scanned copy of your Aadhaar card.

Benefits of having Aadhaar backed EPF UAN

AAdhar

There are many benefits of having an EPF UAN that is linked to your Aadhar card as they are unique to each individual. It serves as an authentic proof of identity, proof of residence, as well as proof of citizenship. The Aadhar card also carries other crucial information about the employee such as biometric data including thumb impression and retina scan. These proofs of identification and information about an individual enables in carrying out transparent processes related to EPF. Given below are some of the benefits of having an Aadhaar backed UAN:

  • Update KYC details: If you have an activated UAN, updating KYC information on the EPF portal is easy. All you need to do is login to your account and go to the Profile menu. Upon selecting ‘Update KYC information’, provide your correct name as mentioned in the document, along with the document number. After this step, you can upload all your scanned documents verified by your employer.

  • Edit personal details: Using your active UAN, you can go to your EPF account online and make the required changes in the Profile Menu, such as email id or phone number, under the options ‘Edit Email ID’ or ‘Edit Mobile No.’ respectively.
  • Modify nominations online: With your activated UAN, employees can update nominations online at any time through the portal. However, once the changes are made, it requires approval from your employer.

    UAN

  • Check online transfer claim status: Members with EPF UAN can check the claim status of online transfers by selecting ‘Claim Status Information’ and entering details such as State and EPFO Office, etc.
  • Link multiple PF accounts: EPFO has advised its members to have their PF accounts linked to the UAN and also to seed KYC data against the unique number.
  • Download Passbook: If you want to download your passbook, you are required to have the UAN number as well as other PF details. After logging in to the member portal and entering your UAN and password, you can go to the ‘Download’ section and download passbook.

The Aadhar linked UAN helps in reducing the chances of creating duplicate accounts, thereby bringing down the chance of errors. At present, out of 7.95 crore UAN issued, only 1.82 crore Aadhaar cards have been linked, and only 1.5 crore numbers have been digitally verified by employers.

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Why you shouldn’t withdraw your PF before maturity

Enacted in the year 1952, the Employees’ Provident Fund is a government-backed savings scheme to encourage the citizens of India to save responsibly for retirement. Attracting citizens with an interest rate of 8.7% per annum, much higher than a savings account (4-6%), parking your money regularly in your PF (Provident Fund) account is a low-risk and a high-gain means of saving money for the future. Despite the benefits it comes with, employees tend to withdraw their money when their backs are faced against the wall, or to invest in their interests. A trend of withdrawing their PF savings between job changes is also doing the rounds. Employees find the process of transferring their PF accounts a tedious process, choosing to withdraw the amount and start afresh in the next job, thereby attracting tax . Withdrawals from accounts maintained for less than 5-years of continuous employment and more that Rs.50,000 in savings has tax levied on them. While it’s possible that citizens have not yet understood the purpose of holding a PF account, or maybe they have their investments elsewhere, choosing not to withdraw your PF savings before maturity can reap enormous benefits. Here are a few reasons why you shouldn’t withdraw your PF savings before the right time and stay invested in the EPF savings scheme:

PF Maturity

You’re eligible for EPF Pension Scheme (EPS)

If you decide to not withdraw your PF savings, a huge chunk of your savings can be shifted to the Employee Pension Scheme, provided you match the criteria regarding age and employment conditions. The EPF Pension is managed by the EPFO (Employees’ Provident Fund Organisation) and is granted to individuals of the organised sector who do not already have any other pension scheme. If found eligible for the scheme, post retirement one can reap the benefits of having a monthly pension income.

EPF insurance has your back

For those employees who have decided against withdrawing their savings from their PF, the EPF insurance can come in handy – at a time when you could need it the most. Just last year, the department of the Employees’ Deposit Linked Insurance Scheme (EDLI) increased the insurance limit from Rs.3.6 lakh to Rs.6 lakh. The employee is eligible for a wage ceiling of Rs.15,000 a month, while the max amount can be an approximate of Rs.3.6 lakh.

In the case of death

For those employees still enrolled with the EPF scheme, an accidental death or death by natural causes doesn’t mean that your savings go down to the grave with you. In fact, the amount is transferred to the employee’s nominee in case of an unprecedented death. In such a situation, the family (nominee of course) can work their way out of this difficult situation with your savings.

EPF is tax-free

EPF is entitled to a triple E status (Exempt, Exempt, Exempt). In a bid to lure employees to invest in the EPF, the government formulated it as a tax-free saving scheme. Although, having said that, premature withdrawals – which are withdrawals before five years of continuous employment and more than Rs.50,000 attract tax as the TDS amount will be deducted. Withdrawing your PF after five years though does not attract any tax.

Attractive interest rates

As of 2015-2016 EPF interest rates were set at 8.7% per annum. Significantly higher than even savings accounts and fixed-deposits, parking your money in a PF account is way more beneficial considering the return on investment – made better by the interest rate.

To put the icing on the cake, in April 2011, the government decided to not pay interest to dormant PF accounts – accounts where there hasn’t been any transaction for 36-months – but as of april this year, they have reversed their decision. Now parking your money – even if it is a dormant account – in a PF account will earn an employee numerous benefits.