New PF Rule: PF Rule changed in April; Know these Important Changes

The New Provident Fund (PF) rule came into force in April. If you are considering changing jobs or have already done so, you should be aware of this rule.

Previously, while moving jobs, one had to fill out and submit a form in order to transfer PF money; however, this is no longer required. When you change jobs, PF will be transferred automatically.

Rules changed from 1st April

According to the new guidelines, if PF money is moved after changing jobs, the transfer will be automatic. Form 31 will not need to be completed for this. When you change jobs during the financial year 2024-25, your PF money will be transferred automatically. That is, will transfer from the previous company to the current one. As a result, the PF work is now easier than it was previously.

EPF: Employees Provident Fund

EPF serves as a savings system for individuals who work for organizations governed by the Employees Provident Fund Organization (EPFO). The EPF system requires both the employee and the employer to contribute equally. Upon retirement, the employee receives this money, which includes his personal contribution, the employer’s contribution, and interest on both amounts. Here’s how EPF interest is calculated.

Interest Calculation

Using an employee’s basic salary and dearness allowance of Rs.15,000 and an interest rate of 8.25%, the interest may be calculated as follows.

Basic salary and DA = Rs.20,000

Employee contribution to EPF = 12% of Rs.20,000 = Rs.2,400

Employer’s contribution to EPF = 8.33% of Rs.20,000 = Rs.1,666

Employer’s contribution to EPF pension = 3.67% of Rs.20,000 = approximately Rs.734

Total contribution = Rs.3134

Current interest rate = 8.25% per annum

Interest is calculated on the monthly operating balance and hence interest per month = 8.5% /12 = 0.7083%

No interest in EPF for the first month

Second month contribution = Rs.3134

Total EPF balance = Rs.6268

Interest on EPF contribution for May = Rs.6268* 0.7083% = Rs.44.39