Provident Fund (PF) is a retirement savings scheme for salaried employees in India. It is a long-term investment that helps employees save for their retirement. Employees and employers both contribute a certain percentage of the employee’s salary towards the fund. The accumulated amount can be used in case of an emergency or to supplement the employee’s retirement income.
Understanding Provident Fund
Under the Employees Provident Fund Organisation (EPFO), all organisations with more than 20 employees are required to register with the EPFO and provide a provident fund for their employees. The amount contributed by both the employer and the employee is deposited in the EPFO. The employer is responsible for depositing the amount on behalf of the employee. The employee can also choose to make voluntary contributions to their PF account.
The EPFO also provides a life insurance cover to its members. The amount of insurance cover is equal to the amount deposited in the PF account. The employer and the employee both contribute towards the insurance premium.
Resigning and PF Withdrawal
If an employee resigns from their job, they can withdraw their full provident fund amount. The employee has to fill in a form and submit it to the EPFO in order to apply for the withdrawal. The EPFO will then process the application and transfer the amount to the employee’s bank account.
The employee can also choose to transfer their provident fund amount to their new employer’s PF account. This will allow them to continue to benefit from the EPFO’s life insurance cover.
The employee can also choose to withdraw a part of their PF amount, if they are unable to transfer it. This will depend on the rules of the EPFO.
In conclusion, if an employee resigns from their job, they can withdraw their full provident fund amount. They can also choose to transfer the amount to their new employer’s PF account or withdraw a part of the amount depending on the rules of the EPFO.