Many people leave their jobs before retirement and many lose their jobs. In such a situation, the question arises that what will happen to his Employee Provident Fund Account (EPF Account).
How long will the interest be received on the money deposited in it. At the same time, the question also arises whether the interest received after leaving the job will remain tax free. Let us know the answers to some such important and questions of your work …
New Delhi. Many people leave the existing company and join another company. Apart from this, there are many people who leave their jobs before retirement. If you are also one of them, then this news is of your use. Actually, many people often forget to transfer their Employee Provident Fund (EPF) after leaving their job. Let us know what happens to your PF account and the amount deposited in it after leaving the job.
Interest will be available on the amount lying in PF account even after leaving the job
Most of the people who leave the job are satisfied that even if they are not investing in their PF account, their deposits are increasing due to interest. So it is important for you to know that if there was no contribution for the first 36 months, the PF account of the employee was put in the category of Inoperative Account. In such a situation, you have to withdraw some amount before three years to keep your account active.
Under the existing rules, if the employee retires at the age of 55 and does not apply for withdrawal of the deposit within 36 months, then the PF account will be inactive. In simple words, even after leaving the company, interest will continue to accrue on the PF account and will not become inactive till the age of 55 years.
The interest earned on the amount of PF is taxable.
According to the rules, the PF account does not become inactive if the contribution is not made, but the interest earned during this period is taxed. If the claim is not made even after the PF account is inactive, then the amount goes to the Senior Citizens Welfare Fund (SCWF). However, the unclaimed amount is transferred to this fund after the account has remained dormant for seven years. Explain that the trusts which are exempted through section 17 of the EPF and MP Act, 1952 also come under the purview of the rules of Senior Citizens Welfare Fund. They also have to transfer the account amount to the welfare fund.
You can claim the amount transferred to the welfare fund for 25 years
The unclaimed amount transferred to the PF account remains in the Senior Citizens Welfare Fund for 25 years. During this, the PF account holder can claim the amount. Explain that the old company does not have much benefit of leaving its PF amount because the interest earned during the period of not working is taxed. Don’t let the account become inactive if you retire at 55. Withdraw the final balance as soon as possible. PF account will not become inactive till the age of 55 years. Still, it is good to transfer PF balance from old institution to new institution. This will raise a decent amount on retirement.
