Now transfer from EPF to NPS with ease
Posted on: 13/Mar/2017 4:07:36 PM
Funds transfer from Employees’ Provident Fund, the retirement savings to the National Pension Scheme falling under Pension Fund Regulatory and Development Authority, PFRDA is now possible. This will benefit over 8 crore members.
The proposal for the same was made during Union Budget 2015-16. Arun Jaitley who made the proposal has now made it a reality after two years.
Jaitley further assured that employees can exit from EPF and get enrolled with NPS. At the same time, employees who draw lesser salary than a particular level can decide whether or not to contribute to the EPF.
The current rule diverts 24 percent of an employees’ salary to the EPF under the mandatory retirement saving scheme.
A circular issued by the Finance Ministry on Tuesday reads that the NPS is gathering momentum as compared to various other retirement products. There are several queries about funds transfer from recognized Provident or Superannuation Funds to NOS. The circular dated 6th March 2017 has clarified this regard.
If you need to transfer the retirement saving to NPS, one has to have NPS Tier 1 account mandatorily. If you do not have one, you can open it through the employer that has implemented NPS. Or online opening is possible via NPS Trust website.
The key benefit of this transfer is that the amount transferred is not taxable, because it will not be treated as the year’s income.
The finance ministry statement also clarifies that the Superannuation fund will not be considered as fund paid by the employer or during the current year. The subscriber cannot also make income tax claim towards this transferred amount
For placing this request for transfer to the NPS account, the individual either belonging to government or private sector has to contact the concerned PF office
The respective PF or superannuation fund trust will then get initiated.
The return on EPF savings will be 8.65 percent, however there are several other asset allocation options and fund managers as offered by the NPS offers.
