Two PF Accounts Explained: How To Merge Them And Whether Withdrawal Is Taxable

Employees often change jobs, but what happens when job switches leave you with more than one Provident Fund (PF) account? If you’ve worked with multiple employers and ended up with two Universal Account Numbers (UANs), you’re not alone. Here’s a clear guide on how to merge PF accounts and whether withdrawing your PF money could attract tax.

Why two PF accounts get created

In some cases, employers unintentionally generate a new UAN instead of linking your existing one. This leads to multiple PF accounts under different UANs, even though the employee is the same. The Employee Provident Fund Organisation (EPFO) allows consolidation of such accounts, provided the correct process is followed.

How to merge two PF accounts

According to guidance available on the EPFO website, if an employee has been allotted two UANs, the latest UAN linked to the most recent employer must be retained, while the older UAN needs to be merged.

To do this, you must transfer the PF balance from the older UAN to the active one by filing Form 13 online through the EPFO Unified Member Portal. Before initiating the transfer, ensure that your Know Your Customer (KYC) details are updated and verified on the active UAN.

EPFO also advises employees to inform both previous employers and write directly to the organisation at uanepf@epfindia.gov.in , clearly mentioning both UANs. After verification, the older UAN is blocked, and the latest one remains active, ensuring all PF contributions sit under a single account.

Can you withdraw PF if your current employer doesn’t offer it?

Yes. An employee is eligible to withdraw PF accumulations if they are not employed with an organisation covered under the EPF Act for a continuous period of two months. Since your current employer does not provide EPF coverage, you can apply for PF withdrawal after completing the two-month waiting period from your last EPF-covered employment.

Is PF withdrawal taxable?

Under the Income-tax Act, 1961, PF withdrawal is tax-free if the employee has completed five years or more of continuous service. Importantly, if you change jobs and transfer your PF balance to the new employer, the service period with previous employers is also counted towards the five-year rule.

However, there’s a crucial distinction. If you withdraw money directly from the first PF account without transferring it to the second one, and your tenure with the first employer alone does not meet the five-year requirement, the withdrawal may become taxable.

On the other hand, if you first transfer the balance from the older PF account to the newer one, and then withdraw from the consolidated account, the combined service period of both employments is considered. Since the total service exceeds five years, the withdrawal will be treated as non-taxable.

One caveat remains: any interest earned during non-contributory periods is still taxable, even if the principal amount qualifies for tax exemption.

If you’re holding multiple PF accounts, merging them is usually the smarter option. It simplifies compliance, preserves tax benefits, and ensures your full service period is counted. Before withdrawing PF funds, always assess your service duration and whether a transfer can help you avoid unnecessary tax.