I resigned from my job in September 2017 and my final contribution to the Employees’ Provident Fund Organization (EPFO) was in August 2017, on the age of fifty years. I joined one other job in January 2018 and commenced contributing to the corporate’s PF belief. I’ve not withdrawn any cash from the EPFO to this point. How lengthy will I get curiosity on the cash deposited with EPFO? How do I withdraw the cash from EPFO? Should I switch the proceeds to the brand new firm’s PF Trust? In case my earlier firm is non-existent anymore and I’m unemployed, how ought to I am going about it?
— P Sudarmani
It is presumed that you’re an Indian passport holder. As per provisions of Employee Provident Fund (EPF) scheme, 1952, curiosity shall not be credited to the account of a member from the date on which the account has turn into an inoperative account.
Central authorities vide Notification no. G.S.R. 1065 (E) dated 11 November 2016 amended the EPF Scheme, 1952, whereby adjustments have been made within the circumstances resulting in a provident fund account changing into an inoperative account. After implementation of such provisions, an account turns into inoperative if no declare has been most popular by the member after attaining the age of 58 years or date of withdrawal, whichever is earlier. Thus, you’ll proceed to earn curiosity on EPF accumulations beneath the earlier employer until you attain 58 years of age.
As per the provisions of the EPF scheme, submit cessation of employment, a member could withdraw the EPF accumulations from the fund if he’s not employed, at every other institution to which the availability of Employees Provident Fund and Miscellaneous Provisions (EPF ) Act, 1952 , is relevant, within the previous two months from the date on which the appliance for withdrawal is made. However, since you may have already began the brand new employment in January 2018, you aren’t eligible to withdraw the PF accumulation and you could get the PF accumulations transferred to the PF belief beneath the brand new employer.
In case your earlier firm is not in existence, and you’re additionally unemployed, then you could apply for the PF withdrawal by submitting the withdrawal software on-line although your account on the UAN portal.
Also, from a taxability perspective, as per part 10(12) learn with Rule 8 of Part A of Fourth Schedule of the income-tax (I-T) Act, 1961, the amassed PF steadiness due and payable to the worker i.e. steadiness to his credit score on the date of cessation of his employment, is exempt from tax if he has rendered steady service for a interval of 5 years or extra. In case there’s change in employment and the PF accumulations beneath the earlier employer is transferred to the brand new employer(s), the cumulative interval of employment with all of the employers is required to be seen for the aim of evaluating whether or not the worker has rendered steady service for a interval of 5 years or extra.
Parizad Sirwalla is associate and head, world mobility providers, tax, KPMG in India.
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