Is Withdrawing Dormant R-PF After 5 Years Taxable? Seeking Clarity on Tax Implications

I would like to know if there is any tax on withdrawing R-PF from a previous employer after 5 years.

Important Consideration

I joined the previous organization in June 2007 and resigned in November 2009. Since then, my PF account has been inactive, and there has been no activity in it. They say it's a dormant account, and I need to complete a few more formalities to withdraw the funds. The additional formalities are not my concern; what concerns me is whether the withdrawal will be taxable or not. Should I wait until June to complete the 5 years from joining my previous organization or from opening my previous RPF account?

Regards,
Wisdom123

To qualify for the exemption, an employee must have actually worked for at least 5 years with the same employer, not just kept the PF account active. Another important point to note is that in November 2012, your account will be treated as a dormant account, i.e., no further interest will be credited to the account. In essence, whether you withdraw PF now or later, the employer's contribution along with the interest is taxable.

Regards,
Amitava

Thanks for a very quick reply, Amitava. I just wanted to confirm again— I left the organization way back in November 2009, and as you suggested, the interest will stop in November 2012. Does this mean the PF account becomes inactive after 3 years of leaving the organization?

HR representatives from my previous employer informed me that my account is already inactive, and no interest has been credited since 2010. Please advise.

Please refer to the notification given on the PF website, where the period of such dormancy was changed from 5 years to 3 years, effective 1st April 2011. As such, my earlier suggestion holds true.

Regards,
Amitava

Thanks, Amitava. It's great news for me as I was expecting that the interest credited to my PF account had already stopped. Since it's been 3 years, it means I'm still earning interest on it. As withdrawal is taxable, I would opt for a PF transfer to my new account at my present employer. Thank you again for clearing up this confusion.

Can you suggest in my scenario - I left my previous company in Nov 2007 and have not applied for PF/Pension transfer yet. I want to withdraw this now. As it's around 5 years, what are the other formalities which I need to do to withdraw PF and pension both except Form 19 and 10C? Please note my previous company maintains PF and pension both in the PF office.

Thanks,
Saurabh

Hi Amitava, I need your suggestion/help. A few months back, I inquired about the tax regarding PF withdrawal. Now, I have received my PF amount credited. My PF contribution + Company contribution was 60k; however, I have just got 61k credited into my account. It seems I received an extra 1k as interest. I tried checking the statement on the EPFO website; however, the format there is different, and I am unable to check the balance. It shows "TH/THA" and 3 empty boxes, but my account number starts with "MH/THN." Could you please let me know how to check the status and why this amount is not matching?

Thank you.