Business Laws and Ethics · Employees Provident Fund and Miscellaneous Provisions Act, 1952

EPF Withdrawal, Transfer and Nomination Rules Explained

Updated 10 October 2026 · Fact-checked

Under the Code on Social Security, 2020, the Provident Fund Scheme sets the detailed rules for withdrawal, advances, nomination and payment on a member's death. The Code itself says an employee's accumulated amount moves with them when they change jobs (Section 22). Answer by naming the Code provision first, then the Scheme rule.

Understand Withdrawal, Transfer and Nomination under the Scheme

A provident fund is a retirement savings account. The employee and employer pay contributions into it, and the balance belongs to the member. Three questions follow. When can the member take money out? What happens when the member changes jobs? Who gets the money if the member dies?

The Code on Social Security, 2020 keeps these answers mostly in the Provident Fund Scheme. The Code gives the framework and the Scheme gives the working detail: conditions for final withdrawal, advances, the nomination form and the order of payment. In the exam, do not invent figures or percentages for these. Say that the Scheme specifies them.

Transfer is covered directly by Section 22. If an employee leaves an establishment covered by the Chapter and joins any other establishment, covered or not, the accumulated amount in the provident fund or pension account is transferred or dealt with as the Scheme specifies. The same applies if the employee moves from an uncovered establishment to a covered one. So the money follows the person and is not lost on a job change.

Section 21 deals with a different point: who keeps the account. Normally the fund body holds the account. The Central Government may authorise an employer to maintain a provident fund account for its own establishment. This is a favourite question because it has fixed conditions.

Nomination lets a member name the person who receives the balance on death. The exact form, who may be nominated and what happens when there is no valid nomination are set by the Scheme. Think of nomination as the member's instruction, so the payment does not have to wait for a legal-heir dispute.

Key rules to remember

Transfer of accounts (Section 22): Job change (covered → any, or uncovered → covered) ⇒ accumulated PF/pension amount is transferred or dealt with as the Scheme specifies; Applies to both the provident fund account and the pension account. The manner of transfer is left to the Scheme.
Authorisation to maintain own PF account (Section 21(1)): Establishment with 100 or more persons + application by employer AND majority of employees ⇒ Central Government may authorise by written order; The authorisation is discretionary ('may'). It is given in the manner prescribed and on Scheme terms.
Bar on authorisation (proviso to Section 21(1)): No authorisation if employer defaulted in PF contribution or committed any other offence under the Code in the 3 years immediately before the authorisation; Both a payment default and any other offence under the Code trigger the bar.
Duties of authorised employer (Section 21(2)): Maintain account + submit return + deposit contribution + allow inspection + pay administrative charges + follow other Scheme terms; All are as specified in the Provident Fund Scheme.
Cancellation (Section 21(3)): Cancel by written order if terms are breached or an offence is committed, after giving a reasonable opportunity of being heard; Hearing before cancellation is mandatory.
Withdrawal, advances, nomination and payment on death: Conditions, limits and procedure ⇒ as specified in the Provident Fund Scheme; The Code supplied here does not list the conditions. Do not quote figures unless your study material gives them.

How to solve Withdrawal, Transfer and Nomination under the Scheme questions

Use this method for any question on withdrawal, transfer, nomination or authorised employers.

1Identify the event: withdrawal or advance, job change, death of the member, or an employer asking to run its own account.
2Name the source of the rule: the Code provision (Section 21 or 22) or the Provident Fund Scheme.
3For a job change, apply Section 22. Check whether the old and new establishments are covered. Then state that the amount is transferred or dealt with as the Scheme specifies.
4For an employer's authorisation, test each Section 21(1) condition in order: 100 or more persons, application by employer and majority of employees, and no default or offence in the last three years.
5For withdrawal, advance or death claims, state that the Scheme sets the conditions. Explain the principle: the balance belongs to the member, and a nominee receives it on death as the Scheme provides.
6Apply the rule to the facts given and state the conclusion in one clear sentence.
7If the question involves cancellation, add that the Central Government must give a reasonable opportunity of being heard.

Quickest way: Three-check shortcut for Section 21 and 22 questions

When to use it: Use this for short-answer questions and case-style MCQs where facts are given and you must decide if a rule applies.

Job change? Think Section 22: the amount follows the employee as the Scheme specifies.
Employer wants its own PF account? Check three things: 100 or more persons, joint application with the majority of employees, and no default or offence in three years.
Cancellation? Look for breach or offence, then check that a hearing was given.
Anything about amounts, limits or forms? Say the Scheme specifies it.

Common mistakes in Withdrawal, Transfer and Nomination under the Scheme

Quoting exact withdrawal limits or percentages from memory.
Students mix older rules and notes with the current Code, which leaves such details to the Scheme.
Fix: State the principle and write that conditions are as specified in the Provident Fund Scheme.
Saying the authorisation under Section 21 needs only the employer's application.
The word 'application' is read without the rest of the sentence.
Fix: Remember that the application must come from the employer and the majority of employees.
Writing that authorisation is barred only if the employer defaulted in contributions.
Students remember the contribution default and forget the second limb.
Fix: Write both: default in PF contribution, or any other offence under the Code, in the three years immediately before.
Assuming transfer under Section 22 works only between two covered establishments.
Students read the Chapter's coverage as applying to both employers.
Fix: The old employer covered and the new employer covered or not is enough. The reverse case (uncovered to covered) is also included.
Forgetting the hearing before cancelling an authorisation.
Cancellation looks like an automatic result of a breach.
Fix: Add that the Central Government must give the employer a reasonable opportunity of being heard before cancelling.
Treating Section 155 as the source of the withdrawal rules.
Students see Section 155 listed in notes and assume it contains substantive rules.
Fix: Section 155 is the Central Government's rule-making power. It lets rules provide, for example, the manner of maintaining an authorised PF account under Section 21(1).

Worked examples

Example 1

Meera Nair leaves a Kochi establishment covered by the provident fund Chapter and joins a small firm in Pune that is not covered. What happens to her accumulated provident fund amount?

Show the solution

Identify the event: Meera relinquishes employment in a covered establishment and takes up another job.
Apply Section 22(a): it applies whether the new establishment is covered by the Chapter or not.
So the accumulated amount in her provident fund account (and pension account, if any) is transferred or dealt with in the manner specified in the Provident Fund Scheme or the Pension Scheme.
Conclude: her balance does not lapse. The Scheme decides the manner of transfer or dealing.

Answer: Her accumulated amount is transferred or dealt with as the Provident Fund Scheme (and Pension Scheme for the pension account) specifies, under Section 22(a).

Example 2

Sundaram Textiles Ltd employs 120 persons. The employer and 70% of the employees apply to the Central Government to authorise it to maintain its own provident fund account. Eighteen months ago the company defaulted in depositing provident fund contributions. Can the authorisation be granted?

Show the solution

Check the size condition in Section 21(1): the establishment must employ 100 or more persons. 120 satisfies it.
Check the application: it must come from the employer and the majority of employees. 70% is a majority, so this is satisfied.
Check the proviso: no authorisation if the employer defaulted in PF contribution, or committed any other offence under the Code, during the three years immediately before the authorisation.
The default was 18 months ago, which is within three years, so the bar applies.
Conclude that the Central Government cannot authorise the company now.

Answer: No. Although the size and application conditions are met, the default 18 months ago falls within the three-year period in the proviso to Section 21(1), so authorisation cannot be made.

Exam tips

Link each answer to a section: Section 21 for authorised employers, Section 22 for transfer. Both are in the supplied official text, so quote them confidently.
For withdrawal, advance and nomination questions, say that the Provident Fund Scheme specifies the conditions. Do not invent numbers.
In case-based questions, tick off each condition in a short list. Step marks go to visible checks.
Learn the three-year proviso and the hearing requirement before cancellation. They are the most testable facts.
In MCQs, watch for options that add conditions the section does not contain, or drop 'majority of employees'.

Practice questions from Employees Provident Fund and Miscellaneous Provisions Act, 1952

Withdrawal, Transfer and Nomination under the Scheme: frequently asked questions

Does my EPF balance move automatically when I change jobs?

Section 22 says that on a job change your accumulated amount is transferred or dealt with in the manner the Provident Fund Scheme specifies. The procedure and forms come from the Scheme.

Where are the EPF advance conditions found?

They are in the Provident Fund Scheme, not in the Code sections covered here. In an exam, say that advances are allowed on the conditions the Scheme specifies.

Who receives the PF balance if the member dies?

The Scheme governs payment on death. A person nominated by the member is the person the balance is paid to. If there is no valid nomination, the Scheme's rules for other claimants apply.

Can any employer maintain its own provident fund account?

No. Under Section 21, the establishment must employ 100 or more persons. The employer and the majority of employees must apply, and the Central Government must authorise in writing. There must be no default or offence in the last three years.

Can the authorisation be cancelled?

Yes. The Central Government may cancel it if the employer breaches the terms or commits an offence under the Code. It must first give the employer a reasonable opportunity of being heard.