Your EPF account becomes inactive if you do not withdraw within 36 months in case you resign from the job before the age of 58 years.
Many leave the job before retirement age. Many of them want to know what happens to the amount deposited in their EPF (Employee Provident Fund) account. Does it continue to get tax-free interest?
It is necessary to state here that even after the age of your retirement, interest continues to be received on the EPF account. Then whether or not there is a new contribution in it. It is true that till retirement or termination of the job, there is no tax on the amount collected in EPF. However, the interest earned on the amount deposited in the PF after grant of resignation, retirement or completion of the job comes under the purview of tax.
Your EPF account becomes inoperative if you do not withdraw within 36 months in case you resign from the job before the age of 58 years. Once the EPF account is deactivated or inoperative, there is no additional interest on it.
The account is operative in these four situations:
1.If the employee retires after the age of 55 years
2.If the subscriber goes abroad.
3.If the EPF member dies
4.If he does not make the settlement within 36 months from the date he is eligible to withdraw money from the PF after resigning from the job.
As per the income tax rules, tax is levied on the interest of EPF balance if the money is withdrawn before completion of five years of continuous service. In the case where the employee works in more than one institution during the first five years of the EPF subscription, the service is considered to be regular if it transfers the EPF balance of the previous institution to the existing institution. In this situation, the employee is believed to have served five years or more continuously for tax purposes.
