Members of the Employees' Provident Fund can now transfer their retirement savings to the National Pension System which comes under the Pension Fund Regulatory and Development Authority (PFRDA).
The funds transferred from a recognised provident fund (PF) account to a National Pension System (NPS) account will not attract any tax, Pension Fund Regulatory and Development Authority (PFRDA) said in a circular dated March 6.
Steps to Transfer your PF money to NPS acount
1. The subscriber should have an active NPS Tier 1 account which can be opened either through the employer (where NPS is implemented) by filling up the prescribed subscriber registration form or through the point of presence (POP) (Banks/non-banks entities registered as POPs with PFREDA) or online through eNPS on the NPS Trust website.
NPS Trust website can be accessed at http://npstrust.org.in/
2. The subscriber presently under Govt./Private Sector employment is required to approach the recognized provident fund/ superannuation fund trust through the current employer by giving a request for the transfer of his recognized provident fund/superannuation fund to his NPS account.
3. The recognized provident fund/superannuation fund trust may initiate transfer of the funds as per the provisions of the Trust Deed read with the provision of I-T Act.
4. The recognized provident fund/superannuation fund may issue the cheque/draft in the name of:
In case of Govt. employee: Nodal office name (PAO or CDDO name)<> Employee Name <> PRAN (12 Digital no.)
In case of the subscriber presently under private sector including all citizen model: POP (Name of the POP) collection account-NPS Trust<> Subscriber Name<>PRAN (12 Digit No.)
5. In the case of the government employee, the employee should request the recognized provident fund/superannuation fund to issue a letter to his present employer mentioning that the amount is being transferred from the recognized provident fund/superannuation fund to be credited to the NPS Tier 1 account of the employee.
6. The present employer/POP that is the nodal office shall while uploading the fund may mention the transfer from recognized PF/superannuation fund in the remark column while uploading it through Arrears mode. The upload may be made as per the request letter of the ex-employer.
7. In case of private sector employee including subscriber under all citizen model, the employee should request the recognized provident fund/superannuation fund to issue a letter to his present employer/POP as the case may be, mentioning the amount to be transferred from the recognized provident fund/superannuation fund to be credited to the NPS account of the employee/individual tier 1 account.
8. The POP will get the amount collected and the same may be uploaded by the POP in the NPS account of the subscriber.
9. According to the current tax laws, withdrawals from the NPS are tax-exempt if subscribers withdraw up to 40 per cent of the corpus when they reach 60 years of age. Overall, an NPS subscriber can withdraw up to 60 per cent of the maturity corpus at the age of 60 and the remaining amount has to be converted into annuity.