Nomination in employees provident fund 1952 for unmarried male persons
Kapil Tiwari
(Querist) 24 December 2012
This query is : Resolved
I am a member of the Employees Provident Fund and have been voluntarily contributing 100% of my basic salary (Rs.6,500/- per month) for the last several years and have been able to save a significant amount in my EPF account as part of my retirement planning.
I am not married and do not intend to get married or raise a family. Hence, I have nominated my younger sister to be the beneficiary of my EPF corpus in case of my death.
I have just come across 2 clauses in the EPF scheme which has me worried:
1)"If a member has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his family.
Any nomination made by such member in favour of a person not belonging to his family shall be invalid."
2)"a family” means—
(i) in the case of a male member, his wife, his children, whether married or unmarried, his dependant parents and his deceased son’s
widow and children."
My queries are:
a)whether, after reading these two clauses, my sister's appointment as my nominee is legal and valid since I have no "family" as defined in point 2 given above,
b)that the entire amount(corpus) in my EPF account will be handed over to my sister without any undue complications in the eventuality of my death,
c)can I also appoint my brother or nephew or cousin as my nominee as long as I am not married and do not have a "family" as defined in point 2 above?
Thanks and Best Regards/Kapil Tiwari
Nadeem Qureshi
(Expert) 24 December 2012
Dear Kapil
it's your choice to appoint your nominee to anyone. it can be your sister, it can be your brother, your relative other then your family too. your servant if you have too.
Kapil Tiwari
(Querist) 25 December 2012
Dear Qureshi Sir,
According to what you write, I understand that my sister (even if she is married) can be my nominee in my Employees Provident Fund Account. Am I correct?
I wish that my sister be not only the custodian of the funds but should also be able to utilise the funds for her own needs. Can I be assured about this?
Thanks and Best Regards/Kapil Tiwari
V R SHROFF
(Expert) 25 December 2012
DON'T YOU HAVE PARENTS??
V R SHROFF
(Expert) 25 December 2012
BETTER TAKE A HOUSING lOAN, AND WITHDRAW ENTIRE FUND FOR HSG,, [TAX FREE]
Purchase a Bank Loaned residential accommodation, in joint name of yours with your sister..
Instalment , interest on bank loan + pf contr , all will be tax free & amt is secured, and appreciation of your money in value increase of property. + someone of u can reside lifetime/ or get rent lifetime when u retire.
Kapil Tiwari
(Querist) 25 December 2012
Dear V.K. Shroff Sir,
I have an 82 year old mother but she has her own investments and files her own income tax returns. Can she still be classified as
my "dependent" parent?
I have taken note of your valuable advice regarding purchase of bank-loaned residential accommodation. However, organising the huge amount involved for the purchase of house will take time.
In the interim period, kindly advise what I should do to protect my provident fund accumulations so that they are paid to my sister or brother(blood relations) only:
a)Should I now re-nominate my old mother for the provident fund account and not my younger, unmarried sister? Only in the eventuality of my mother's death, should I nominate my sister? Will then, as I will have no member of "family" as defined by the provident fund rules, will my sister's nomination be valid?
b)Or, will the present nomination of my younger, married sister be valid and the funds will be paid to her after my death?
c)In the absence of or in case of an invalid nomination in provident fund, who can claim the accumulations? Does the Hindu Succession Act apply here as well?
I shall ever be grateful to you for your clarifications and advice.
With kind regards, Kapil Tiwari
Raj Kumar Makkad
(Expert) 01 January 2013
Nominee is just a trustee who has to disburse the amount as per Hindu Succession Act so even if an employee do not make his nomination, the amount is disbursed as per HSA though list of beneficiary is sequence-wise. You can nominate your mother also as desired and if she become predeceased then your sister can be nominated and nomination can be got changed as many times as you desire.
Kapil Tiwari
(Querist) 01 January 2013
Thank you very much, Sirs!
