6 Things NRIs Should Know About Their PPF Account In India

Before you declare your NRI status, there are certain things that require your attention like your PPF account. What is a PPF account? PPF or The Public Provident Fund was introduced by the Ministry of Finance in India in the year 1968. Many include this scheme as part of their retirement planning. It is a tax-free savings scheme which can be availed by any Indian resident. However, an NRI cannot open a fresh PPF account. But PPF account opened before a person became an NRI can be maintained. Below are the 6 things NRIs should know about holding a PPF account in India:

NRIs Should Know About Their PPF

Opening new PPF account

NRIs cannot open a fresh PPF account in India. If you wish to open a PPF account, do it before you declare your NRI status or before you go onsite.

Maintaining existing PPF account

Though NRIs cannot open a fresh PPF account, they can maintain the PPF account they opened before they became an NRI. They need not close their existing account. From 2003, NRIs are allowed to make contributions towards their PPF account.

Interest rate for NRIs

Both Indian residents and NRIs get the same interest rate. There is no separate interest rate for Non-Resident Indians. Currently, the interest on PPF account is 8.1% per annum.

Maturity of PPF account

Generally, PPF account has a lock-in period of 15 years. After 15 years, the account holder can submit a request and extend the PPF account maturity for another 5 years. However, this facility is not extended to NRIs. Non-Resident Indians cannot extend the maturity date on PPF account after completing 15 years. If an NRI PPF account holder does not withdraw the amount after the maturity date, the account will be marked as non-contributable PPF account and the account holder will not be allowed to deposit money into it.

Tax exemption

There is no difference in the tax benefits received by an Indian resident and an NRI. Taxes are exempted for both parties. The income made in PPF account is also tax-free.

Excellent savings scheme

NRIs can use PPF account to plan their retired life. If they contribute a decent amount every year, they will get a lump sum amount while retiring or upon the maturity of the PPF account. If you are planning to settle abroad, invest in a PPF account before you take your flight.

Public Provident Fund is one of the best financial product available to Indian residents to make some savings for future expenses. To plan your financial life better, open a PPF account today.

UAN Services Go Mobile with M-EPF App

As we move into the future, our lifestyle is beginning to rely heavily on technology. Thinking 10 years in the past, it would have been difficult to imagine that a smartphone could allow you to order essentials such as food, groceries or services such as banking. But then, 10 years back, smartphones has just about made an entry in the market and were quite basic in their functionality. As technology improved over the years, more and more services started becoming available online.

M-EPF App

One of the services which has adapted itself to the changes in people’s habits is the EPF or the Employee Provident Fund Organization. Starting with an online website which allows employees to carry out a multitude of functions, EPFO has also launched a mobile app early last year to bring added convenience to members.

In India, there are millions of individuals, subscribers and pensioners, who are members of EPFO, the government run retirement fund organization. While the EPFO website already provides assistance to a number of services not only to members but also to employers, the newly introduced EPFO app called ‘m-epf’ will facilitate users to perform a number of EPF related functions right from their mobile phone itself. The app can be downloaded from the Google App store on Google Play. The welcome screen of the app will ask you whether you are a member, pensioner or employer. You have to choose from the appropriate option before proceeding.

Currently the functions available within the M-EPF mobile app are limited. Members can either activate their UAN (Universal Account Number) from the app or check their EPF balance or view their EPF Passbook from the app.

How To Activate UAN From the M-EPF APP

If you want to activate your UAN from the app, you must click on the tab that reads ‘Activate UAN’. For this activation, you will be asked to provide information for required fields such as the Establishment Code, Extension, Employee Number, 12 digit UAN and your mobile number. Once you have provided all information, make sure you check the box that asks you to declare that all details provided by you are correct. Finally, click on the tab that reads ‘Activate’. If all information entered by you is correct, your UAN will successfully be activated.

SMS Based UAN Activation

Alternately, customers who do not have a smartphone can also activate their UAN via SMS. They will need to send an SMS to 7738 299 899. Once the UAN is activated, members can receive information pertaining to their EPF account, such as passbooks, account credit, etc.

Missed Call Service

Along with the M-EPF app, EPFO has also introduced a Missed Call Service to allow members to check their EPF balance. Members simply have to dial on 011 2290 1406 and they can find out their EPF balance, along with other account related information.

Checklist for EPF withdrawal

The EPF money sometimes proves to be a blessing in disguise when you are in need of some corpus. Usually, people withdraw the EPF money whenever they feel like. However, some fail to receive the EPF money through the normal withdrawal process. The EPFO has recently introduced new PF withdrawal forms for employees for members who have registered UAN. The new process is much easier and the amount is directly credited to the employee’s bank account.

Checklist for EPF withdrawal

Checklist for withdrawal of EPF

Given below are some of the basic things that you need to keep in mind before applying for EPF withdrawal:

Check basic information

Ensure that before you apply for PF withdrawal, all the information updated in the EPFO account is correct. Information such as name, member id, date of birth, date of joining, date of exit, father name, etc. should be updated correctly in your EPF account. It should be verified by your employer. The information can also be checked through the UAN dashboard or even in your EPF passbook. Any misinformation or mismatch in the basic information could result in a failure to receive the PF. For rectification of personal basic detail, you must provide a joint declaration with your employer and attach it along with the EPF withdrawal form.

Attest documents required

All the documents that you send to the EPF must be attested by your employer. The important documents that need to be submitted include the withdrawal form, copy of PAN, copy of passbook, etc. However, the latest EPF withdrawal form allows you the freedom to bypass the employer provided your Aadhaar is linked to the EPF account.

Attach bank account proof

The EPF money is transferred to your bank account upon withdrawal. Therefore, your EPFO account should have your correct bank account details. You are required to submit a proof of your bank account such as a cancelled cheque or a copy of your bank passbook.

Give reason if account is inoperative

If your EPF account is inoperative, you must explain the reason by attaching a letter that states the reason for delay. However, effective 2016-17, no account shall become inactive irrespective of contribution.

Apply after two months of unemployment

EPF withdrawal is only possible before retirement unless your unemployment period has been a minimum of two months. Therefore, you cannot withdraw your EPF soon after you quit your job. Ensure you wait for two months before applying for EPF withdrawal or the form may get rejected.

Attach copy of PAN and Form 15G/15H

If the EPF amount is above Rs.50,000, it is mandatory to submit the copy of your PAN card. If PAN card is unavailable, you can also furnish Form 15G/15H.  If you do not submit a copy of your PAN, TDS is deducted at a higher rate.

Sing on the form

Do not forget to put your signature on the EPF withdrawal form without which it is considered invalid.

In case of extra contribution, explain

Any extra contribution in your EPF account even after you leave your job, requires an explanation. You are expected to explain in a letter about the circumstance under which any extra contribution was made towards your EPF account.

Your bank account should be active

The EPF amount cannot be deposited in an inoperative or dormant account, therefore, your account should be active at the time of application.

Updated mobile number of form

The EPF withdrawal form should have your updated mobile number so that the EPFO can contact you in case of any discrepancies. It is also important for receiving claim settlement status through SMS.

UAN on PF withdrawal form

It is mandatory to mention the UAN on PF withdrawal form, therefore it is important you check that it is present on the form when you apply.

There is also a checklist that the employer must follow when they forward the EPF withdrawal application of the employee:

  • Verify the Form 9 and ensure it is updated with the EPFO.
  • All details of the member must match with the information on Form 9.
  • Provide an authorised signature to the EPFO.

There are many other details that must be verified and rectified from the employer’s end.

Before following all the steps in the checklist, be sure of the decision to withdraw your EPF as it is a retirement corpus that might take time to rebuild if withdrawn earlier.

Important things to know about EPF UAN

UAN or Universal Account Number is a unique 12-digit number that is linked to your provident fund money.  UAN has been introduced to simply the process of collecting and handling the PF money for employees. Thanks to UAN, you need not have multiple EPF accounts, rather use your UAN to link to the member ids provided by your employer. UAN is also assigned to employees’ with EPF accounts under private trusts.

Know about EPF UAN

Things to know about EPF UAN

Some of the key features of having the UAN linked to EPF accounts are:

Direct link between employee and EPFO

With the introduction of UAN, any communication related EPF can happen between the employee and EPFO, without the intervention of the employer. Earlier, most or all of the EPF related transactions such as withdrawals and transfer of EPF, required the employer to be contacted. It required attestation from the employer for the process to move further. With the current change, the employer will only deposit the EPF amount in your account.

Facility to update KYC details online

The earlier withdrawal process gave a lot of scope to error when the same individual had different address and contact information with each employer, leading to a lot of issues and delays in PF transfers and withdrawals. The UAN based EPF allows its members to update personal information through a single window. By logging in to the EPF website and using the UAN number, you can now update your contact details such as address, phone number, email, and other KYC details. These changes can be made at any time as and when required.

SMS notification on deposit of PF

With the latest EPF processes in place, now you will receive a SMS notification every time your employer deposits your provident fund money. This serves as an assurance that our employer is paying the EPF money on time.

Transfer of PF money using UAN

When you change a job, you are only required to provide your UAN to your employer and the EPF amount gets automatically transferred within one or two months.

Same UAN throughout

The most advantageous thing about UAN is that it remains the same throughout the entire time in your career. Every time you switch your job, all you are needed to do is provide your UAN and the new employer creates a member if and tag it to the same UAN. UAN serves as a database of all your employers and your past experiences.

Transactions using UAN in your EPF account

EPF members having activated UAN can do the following transactions:

  • You can download the passbook using you UAN
  • Download the UAN card
  • You can also list previous member IDs
  • You can modify KYC details
  • Edit other personal details by logging in using UAN
  • You can also check eligibility for online transfer claim

As having an activated UAN comes in handy for most EPF related transactions, it is advisable to activate it as soon as possible.

Pension withdrawal made simpler with UAN for EPF members

The EPFO (Employees’ Provident Fund Organisation) has now introduced new pension claim forms that are based on UAN (Universal Account Number). The all-new Pension claim form 10D does not require employer’s attestation for pension withdrawal. This is one of the steps that EPFO has taken to make EPF/EPS accounts more user friendly for their subscribers. The process of pension withdrawal so far needed to be routed through the employer, which led to unnecessary delays.

Pension Withdrawal Form

Role of UAN in simplifying EPF withdrawal

According to EPFO, EPS subscribers are required to link their bank account number and Aadhaar details with the UAN. In this process, the KYC (Know-your-customer) verification involves contacting the employer. Following this, an employee can approach EPFO for withdrawing pension using UAN.

New UAN based Form 10D (Form 10D – UAN)

The new Pension claim form 10D has been introduced as a step towards simplification and rationalisation of forms. It is a known fact that withdrawing money from the EPF account is a time taking as well as a complicated process. However, this initiative taken by the government is expected to change things with time. This claim form can be used by members who have their bank account information and Aadhaar information seeded into the UAN. However, to be able to use the new UAN based Form 10D, the following criteria must be fulfilled:

  • The new Form 11 must be duly filled by you. Since its introduction, the new employees have been asked to fill the same at the time of joining.
  • Your EPFO account should have the details of your bank.
  • Your employer should have verified the bank account number.
  • You should have an activate UAN.
  • You should have an Aadhaar Card in your name.
  • Your Aadhaar Card should be linked to the UAN.
  • Your Aadhaar details should be authenticated by your employer.

Most of these criteria are fulfilled by all employees except linking UAN with their Aadhaar. Sometimes employers fail to verify Aadhar of their employees. However, if you fall under the category who fulfils all the criteria listed above, you can use the latest UAN based EPF form without the need for employer’s attestation.

Changes in the new form

The Form 10D – UAN is used to withdraw pension after retirement. This form is a lot simpler than the previous 10D form as it is not lengthy and detailed. The only information that is required in this form is the UAN number and your basic personal details. The previous 10D form was six-page long, whereas the latest UAN based form is only a single page.

The old process of pension claim

The old process of pension claim required the employee to fill the six-page long 10D form after retirement or superannuation. The employee was also required to attach the PAN copy and cancelled cheque along with the form. The form was then submitted to the employer which was later attested by the employer and forwarded to the regional EPF office.

Using the UAN based pension form

The first step to be able to use the UAN based form is to link your Aadhaar with the UAN. You must also ensure whether your employer has verified your Aadhaar or not. This can be easily done by visiting the UAN portal. You can download the new form from the EPF portal, fill it, and send it directly to the concerned EPF office.

EPFO is taking a lot of initiatives for pensioners. The new Pension claim form being one of them. Apart from that, EPF members can now enhance their pensionary benefits. This benefit will be available to those who decide to defer their pension above the age of 58 years till the age of 60, with or without any contribution after they turn 58 years old.

EPFO investments in ETFs is giving higher returns than G-Secs

At an ASSOCHAM (The Associated Chambers of Commerce of India) event, the Secretary of Ministry of Labour and Employment said that investing in equities has reported 12% higher returns than government securities in a span of one year. The Indian Government assured EPFO (Employees’ Provident Fund Organisation) that investments in ETFs is a good idea if considered as a long term investment. As of July 31, 2016, a return of over 12% in equity investment was reported when compared to 8 or 7.5% on G-secs.

epfo-759.jpg
ETF or Exchange Traded Funds hold several assets including stocks, bonds, and commodities. The EPFO has invested Rs.7,465 crore on ETFs starting August last year to June, this year. Initially, the EPFO had decided to keep aside 5% of its available funds in ETFs, however it has the flexibility to deposit up to 15% of its investible deposits in equity related scheme or equities. The Secretary of Ministry of Labour and Employed has stated that they are planning to adopt a central architecture starting from 30th September. This move is expected to make the process more transparent and make certificates accessible online, making it easier to decide on investing in equity.

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.