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Having multiple UAN make a huge dent into your retirement savings -- How to fix it? Explained
Having more than one UAN can harm your financial health by causing interest loss, resulting in rejected or delayed EPF withdrawals or creating tax complications among others.
Multiple UANs harming your financial health
Your Universal Account Number (UAN) is a unique 12-digit identifier that is linked to your EPF accounts. If you have changed your job and have not provided your previous EPF account details to the new employer then your new employer will create a fresh EPF ID. This may lead to a second UAN being generated on your PF account. Having more than one UAN can harm your financial health by causing interest loss, resulting in rejected or delayed EPF withdrawals or creating tax complications among others.
When can you have two UANs?
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A second UAN can be generated on your PF account for several reasons. If you have changed your job and have not provided your previous EPF account details to the new employer then your new employer generates a fresh UAN. Your new employer can create a new UAN if your previous employer has not updated your exit date in the Electronic Challan and Return system. It could also happen due to data mismatches or KYC issues such as Aadhaar not linked or your name being slightly different on different documents etc.
How can multiple UANs harm you?
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If you have more than one UAN then there are chances that you may be losing out on interest in your inactive EPF account that is linked to your previous UAN as EPFO does not pay interest on an account that is inactive for more than 3 years.
Multiple UAN drawback
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Managing your Provident Fund accounts may become more difficult if you have two UAN numbers. You might only be able to access one account at a time when making a withdrawal which could reduce your overall withdrawal limits.
UAN Inactive
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If you have left your previous job more than 3 years ago then your PF account under old UAN might become inactive. The tax authorities might treat interest earned on these non-contributory balances as taxable income.
How to check if you have more than one UAN
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Check your EPF passbook using your Aadhaar or mobile number to see whether you have more than one UAN. Receiving SMS alerts from different UANs when contributions are credited is another indication that you have multiple UAN.
What to do when you have multiple UANs?
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If you have more than one UAN, the system automatically deactivates the previous one once all EPF balances are transferred to the new active UAN. The first step is the process to submit an online EPF transfer request through the member portal of EPFO. You log in using the UAN you want to keep active, verify your KYC details and start a transfer from the previous member ID. Once the transfer is approved by the employer and processed, the older UAN automatically becomes inactive on its own.
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