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UAN - Universal Account Number - Things to note

What is UAN?

The UAN or the Universal Account number is a 12 digit unique number allotted to each member of the Employee Provident Fund (EPF) which helps them to manage their EPF account.

The UAN will be associated with an employee and will connect all his PF (Provident Fund) accounts across organizations.

This number is issued by the Ministry of Labor and Employment, Government of India.

If an individual changes his job, he will get a new PF account with the organization. This way, multiple PF account numbers will be allotted to an employee. Multiple PF account numbers is an area of concern as many employees report grievances related to transfer and withdrawal of PF amount. To counter this problem and to make the management of provident fund accounts easier, the concept of UAN was introduced The UAN is a single account number that will connect the multiple IDs associated with an employer. With UAN, an employee can connect all his EPFO accounts to make the process of PF withdrawal and transfer easier.

Advantages of UAN

Once you have the UAN number and you register it then you can check many details. Benefit Of Registration of UAN  at UAN Member e-Sewa Portal are as follows:

  • You can download the updated EPF passbook. The passbook will tell you the EPF balance broken into Employee Contribution(EE) and Employer Contribution (ER). Also deduction for Employee Pension Scheme (EPS). Sample passbook is shown below.
  • You can link your previous PF accounts (before Oct 2014) which are not linked to UAN number.
  • All you have to do to bring your PF accounts together is give your UAN to current employer. After KYC verification, you will be able to view and manage all accounts.
  • You will get notifications on your mobile every time your employer makes a monthly deposit in your PF account.
  • You will know about all the movements in your PF account and thus, your employer cannot dominate the same anymore.
  • You can verify your transfer claims on EPFO web portal by mentioning your UAN.
  • You can change the mobile number and email address.

Read about the step by step process of opening your UAN account in the next article.

Salary / Tax - 07/14/2018
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Basics of Employee Pension Scheme (EPS)

We have discussed the basic contributions of EPF and how the money is invested, contributed and received by the employees. There is a component called EPS (employee pension scheme) and as per the law, a fixed amount or % of the employer’s contribution goes towards EPS which works as a retirement pension corpus for the employees.

While reading about EPF, I realized that EPS is more detailed than I had imagined and it has implications on the financial decisions of each employee. At the outset, it is a very good scheme, each month 8.33% of the basic pay is contributed towards EPS and on retirement, one gets the money back as a pension. Thus, the EPS part of your EPF works like an annuity plan.

Employees’ Pension Scheme (EPS)

  • Employees are automatically enrolled in the EPS Scheme only if they are members of the EPF scheme.
  • EPS is financed by diverting 8.33% of employer’s monthly contribution from the EPF. Monthly contribution to EPS is restricted to 8.33% of Rs. 15,000 i.e. Rs. 1250.
  • Unlike the EPF contribution EPS, the part does NOT get any interest.
  • The fraction of service for six months or more shall be treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded up to 10 years.
  • The lifelong pension is available to the member and upon his death members of the family are entitled for the balance pension.
  • Pension received is lifelong and passes on to spouse and two children upon the employee’s death
  • Employees can receive only pension from EPS and are eligible only after completion of 10 years of service and must have attained the age of 50 years for early pension and 58 years for regular pension
  • No pension is payable before the age of 50 years.
  • The maximum Pension per month is subject to a maximum of Rs 3,250 per month.
  • Maximum service for the calculation of service is 35 years.
  • No pensioner can receive more than one EPF Pension.

When can Employee Avail the Pension

Unlike EPF, EPS cannot be withdrawn at any point of career. There are only specific cases where the same will be receivable:

  • Through Superannuation, where he/she has completed 10 years of service and is above 58 years and can continue to work. No fresh EPF will be made in his/her name.
  • Early pension, when completed 10 years of service, between 50 to 58 years and is not working anymore.
  • Unfit to perform the job or permanent disability

Transfer of EPS on Transfer of EPF from one company to another. 

  • When the employee switches jobs, the EPF gets transferred to the new employer, but not the EPS.
  • When the employee switches jobs, the EPS amount or carries it forward to the next job. This, however, depends on the length of his service and his age.
  • If EPF gets transferred the EPS also gets transferred. However, the UAN passbook shows amount as 0.
  • While transferring PF from one establishment to another, the service details, information (like the length of service, non-contributory period, last wages drawn are furnished to the receiving PF office in Annexure K which will be used to calculate the pension benefits. AMOUNT IN PENSION FUND IS NOT REQ”.

Claiming Pension Money

  • If you have scheme certificate of pension

Once the employee crosses the age of 50, he or she is entitled to get pension by Scheme Certificate. The employee is required to fill Form 10-D to avail regular pension. If the employee has more than one Scheme Certificate, he or she can directly go to the EPF office. This requires attestation of the employee’s Form 10-D by the bank manager.

  • If you don’t have scheme certificate of pension

In case an employee has not completed 9.5 years of service, you must claim a pension refund. In order to do, you have to fill Form 10-C along with EPF Withdrawal form and submit it through your employer.

Salary / Tax - 07/12/2018
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Forms of EPS

There are various forms that need to be submitted to avail different benefits under Employee Pension Scheme. They are:

Form name Filled by Benefit
Form 10C Beneficiary or member ·        Withdrawal benefit

·        Scheme Certificate
Form 10D Member ·        To avail pension after 58 years of age

·        To avail pension before 58 years but after turning 50

·        To avail disability pension
Form 10D Nominee or widow/widower or Children ·        To avail nominee or dependant pension

·        To avail family pension

·        To avail children or orphan pension
Life Certificate Pensioner ·        To be submitted by pension beneficiary or children every November

·        To be submitted to the manager of the pension disbursing banks
Non-remarriage Certificate Widower/widow ·           To be submitted by widower every year

·           To be submitted by the widow at the beginning of pension
Salary / Tax - 07/02/2018
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House Rent Allowance (HRA)

House Rent Allowance is a component of the salary provided by the employer to his/her employee. If you receive HRA as part of your salary and you live in a rented accommodation, then you can claim full or partial HRA exemption u/s 10. However, HRA is fully taxable if you don’t live in a rented accommodation. How to calculate HRA? Your HRA depends upon the following 4 factors. They are:
  • Salary
  • HRA component
  • Rent Paid
  • Location of your rented house
Tax exemption on HRA is least of the following: 1) Actual HRA received 2) Actual rent paid reduced by 10% of salary 3) 50% of basic salary if the taxpayer is living in a metro city 4) 40% of basic salary if the taxpayer is living in a non-metro city Since the least of the above is exempt from tax, you can ask your employer to restructure your salary to get maximum tax benefit.
                                                                                                  Pay rent and save taxes
What if my employer does not provide me with the HRA? If you are making payments towards rent for any furnished or unfurnished residential accommodation occupied by you, but do not receive HRA from your employer, you can still claim the deduction and that would be under Section 80GG. Conditions that must be fulfilled to claim this deduction:
  1. You should be self-employed or salaried
  2. You have not received HRA at any time during the year for which you are claiming 80GG
  3. You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of office, or employment or carry on business or profession.
In case you own any residential property at any place other than the place mentioned above, then you should not claim the benefit of that property as self-occupied. That other property would be deemed to be let out in order to claim the deduction under section 80GG. Refer our Articles on Income from house property where we have discussed this in detail. As per section 80GG of the Act, the least of the following will be considered as tax-free:
  1. Rs 5,000 per month;
  2. 25% of adjusted total income*;
  3. Actual Rent less 10% of adjusted total Income*
*Adjusted Total Income means Total Income Less long-term capital gain, short-term capital gain under section 111A and Income under section 115A or 115D and deductions 80C to 80U (except deduction under section 80GG). How to Claim HRA When Living With Parents? Where you are staying in your parents’ house and your parents are owner of the same, you can still claim the HRA. You can pay the rent to your parents and claim the allowance provided. You will have to enter into a rent agreement with your parents, provide their PAN card to your employer, also generate rent receipts. In this case, please note that the rent amount that you showing as payment to your parents will be taxed as rental income in their hands. Is my landlord's PAN mandatory to claim HRA? Yes, it is where your annual rent crosses 1 lakh INR. If your landlord does not have a PAN, then you (as the employee) have to obtain the declaration to this effect from the landlord along with  the name and address of the landlord. A Format of Deceleration May be as follows :- Date To Name & Address DECLARATION I ____________(Full name and address of the declarant) aged ____ do hereby declare that I have leased the Flat No._______________________________ From 1st April’2018 to 31st March’2019 to ___________( Name of lessor) at a monthly rent of  Rs. _______/- ( __________________ only). Further I do hereby declare that my total income during the financial year 2018-2019 did not exceed the statutory  limit prescribed under Income tax Act,1962 and have not assessed to tax and does not have a PAN card . Verification I,_________________ do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today, the _____________ day of _________________
Date : ________________Place : ________________ (Name of the declarant)
HRA is one of the most common component of a salary structure and hence, you must claim the same where you are staying on rent. If you are not staying on rent and living with your parents, it is important you analyse the overall family's taxability before declaring that you are paying rent to your parents.
Salary / Tax - 01/09/2018

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