I’ve been a member of the employee provident fund (EPF) for the earlier 16 years. My current group, which I’m now quitting after higher than three years, has a personal PF Trust. I could be changing into a member of a model new agency which is part of the EPFO.
My current employer claims that the EPFO has stopped accepting funds from private trusts. Is this correct? If I was to withdraw all of the proceeds from my PF account, will or not it is matter to tax deducted at provide (TDS)? Can my current agency, being a personal perception, moreover stop paying curiosity throughout the subsequent three months?
—Name withheld on request
We will not be capable of contact upon the exact positions taken by the EPFO with regard to your group.
As per the provisions of the EPF scheme, an individual can swap the amassed stability from his EPF account held with the erstwhile employer to that at a model new employer, whatever the fact that the sooner or new account is an authorised PF perception or held with the EPFO.
As per tips, the amassed PF stability due and payable to the employee, as on the date of cessation of his employment, is exempt from tax if an employee has rendered regular service (along with the interval of earlier membership with earlier employers) for a interval of 5 years or additional. Any curiosity accruals submit cessation of employment will not be tax exempt.
Accordingly, if the amassed stability alongside together with your erstwhile employers had been transferred to the PF Trust of your current employer, the interval of contributory service hitherto would even be added to the interval of regular service.
Further, in case you can swap the soundness held in your current PF account with the PF Trust to the PF account of your new employer, the an identical shall even be added to your interval of regular service. In such a case, as your mixture interval of regular service could be higher than 5 years, all of the amassed stability to the extent specified must be exempt from tax on the time of withdrawal.
A PF member would possibly withdraw the entire amount standing to his credit score rating throughout the fund solely on ceasing to be an employee in any establishment to which the PF Act applies, provided that he has not been employed in any lined establishment for a gradual interval of not decrease than two months immediately earlier the date on which he makes an software program for withdrawal.
A PF account turns into inoperative and would not earn further curiosity, the place an employee retires from service after attaining the age of 55 years or migrates abroad fully or dies and would not apply for withdrawal of his amassed stability, inside 36 months from the date it turns into payable. Until such time, curiosity will proceed to accrue on the PF stability (whether or not or not in a PF Trust or with EPFO).
Thus, relying in your age and specific particulars, precise implications would must be evaluated.
Parizad Sirwalla is affiliate and head, world mobility corporations, tax, KPMG in India.
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