Millions of people lost their jobs during the Corona crisis. In such a situation, the question arises that what will happen to their Employee Provident Fund Account (EPF Account). How long will you get interest on the money deposited in it. At the same time, the question also arises whether the interest received after leaving the job will be tax-free. Let’s know some such important questions and answers to your work …
New Delhi. The economic activity came to a standstill due to the lockdown imposed to prevent the spread of the corona virus. Companies took tough decisions for cost cutting in difficult circumstances. During this time, the jobs of millions of people have been lost. At the same time, due to the fear of infection, many people left the big cities and moved to smaller cities, towns and villages. However, during this time some people left the existing company and joined another company. If you are also one of them, then this news is of your use. Actually, many people forget to transfer their Employee Provident Fund (EPF) after leaving the job. Let us know what happens to your PF account and the amount deposited in it after leaving the job.
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Even after leaving the job, interest will be available on the amount lying in the PF account
Most people who leave jobs 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 in the first 36 months, there was no Contribution, then the PF account of the employee was put in the category of In-Operative Account. In such a situation, you will 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. Understand in simple terms, even after leaving the company, interest will continue to be paid on the PF account and will not be inactive till the age of 55 years.
According to the tax rules, the interest paid on PF amount after leaving the job , the PF account does not become inoperative due to non-contribution, but the interest received during this time is taxed. If the claim is not made even after the PF account becomes inactive, then the amount goes to the Senior Citizens Welfare Fund (SCWF). However, the unclaimed amount is transferred to this fund after the account remains inactive for seven years. Explain that trusts exempted under Section 17 of the EPF and MP Act, 1952 are also covered under the rules of Senior Citizens Welfare Fund. They also have to transfer the amount of the account to the Welfare Fund.
You can claim the amount transferred to the Welfare Fund for 25 years; Claims
transferred to the PF account remain in the Senior Citizens Welfare Fund for 25 years. During this time the PF account holder can claim the amount. Explain that the old company does not have any special benefit of leaving its PF amount because the interest earned during the period of not doing the job is taxed. If you retire in 55 years, do not let the account become inactive. Withdraw the final balance as soon as possible. PF account will not be inactive till the age of 55 years. Nevertheless, it is good to transfer the PF balance from old institute to new institute. This will raise a fair amount on retirement.
