I resigned from my job in September 2017 and my final contribution to the Staff’ Provident Fund Group (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 I’ve not withdrawn any cash from the EPFO to date. How lengthy will I get curiosity on the cash deposited with EPFO? How do I withdraw the cash from EPFO? Ought to I switch the proceeds to the brand new firm’s PF Belief? In case my earlier firm is non-existent anymore and I’m unemployed, how ought to I’m going about it?
— P Sudarmani
It’s presumed that you’re an Indian passport holder. As per provisions of Worker Provident Fund (EPF) scheme, 1952, curiosity shall not be credited to the account of a member from the date on which the account has grow to be an inoperative account.
Central authorities vide Notification no. G.S.R. 1065 (E) dated 11 November 2016 amended the EPF Scheme, 1952, whereby modifications have been made within the circumstances resulting in a provident fund account turning 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 below the earlier employer until you attain 58 years of age.
As per the provisions of the EPF scheme, publish cessation of employment, a member could withdraw the EPF accumulations from the fund if he isn’t employed, at every other institution to which the supply of Staff 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. Nonetheless, since you’ve 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 below 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 utility on-line although your account on the UAN portal.
Additionally, from a taxability perspective, as per part 10(12) learn with Rule 8 of Half A of Fourth Schedule of the income-tax (I-T) Act, 1961, the accrued 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 may be change in employment and the PF accumulations below 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 accomplice and head, international mobility providers, tax, KPMG in India.
Supply: Live Mint