I can't wait anymore for Lumia Denim Update and I am planning to use PFD for getting 8.1 Update. So after updating I will remove PFD and reset my device and sign in with a new Microsoft account. Will there any problem due to that?
Where are your Contacts stored? In the cloud with your current Microsoft Account?
Whatever is with your account stays with your account. If your Contacts are with a Gmail, just link that in email + accounts and choose to sync contacts. But if they are with Microsoft and you change to a different Microsoft Account during setup you loose Contacts, Apps, Back ups, OneDrive... Whatever was attached to the old Microsoft Account goes away.