Understanding PF Interest, Taxation, and Withdrawal Rules: Expert Insights

I left my last company on 15th April 2011. After that, due to some health issues, I could not take employment anywhere, and I did not withdraw my PF. My last salary/PF credit happened in March 2011. While working in this company, I applied for a PF transfer from my earlier company, which took place around February 2012.

PF Account Status and Interest Query

Now, as per the dormant PF rule, I am wondering whether interest would stop on my PF account from March 2014. Or will it be considered active because a PF transfer happened in between? Now, I want to withdraw this PF amount. What is the process?

Thanks a ton.

Regards,
Rama Krishna

Impact of Dormant Provident Fund Accounts on Interest Earnings

As per the last notification issued by the Employees Provident Fund Organization (EPFO), all those who have left their employee provident fund accounts dormant for more than three years, after changing jobs or retirement, will soon stop earning interest. An active PF account is mandatory to avail of interest from the EPFO. However, after three years of inactivity, the PF balance will stop earning interest.

For example, if an employee’s last PF amount was deposited in their account on 01.04.2011, they will earn interest on the total accumulated funds until 31.03.2014.

Secondly, if your previous funds have been transferred to your existing account, you are not liable to get interest on the dormant account.

Finally, for withdrawing your accumulated fund, you need to submit Form No. 10C and 19 to your HR/Compliance team for the withdrawal of your Pension and PF funds, respectively.

Regards,
Janardan

Thanks, Janardan. You mentioned that the previous fund is transferred and not eligible for interest? Please elaborate. From when am I not eligible for interest? Is it like if somebody transfers the previous amount, they are not eligible for interest?

Also, I was reading this on the web. If I withdraw PF now, i.e., before 5 years of continued service, there will be tax. I worked from June 2006 to June 2009 and then from March 2010 to March 2011. So, if I submit my PF withdrawal form now, will I be subjected to tax? I am not currently employed. Thanks.

Somebody, please clarify my queries...

1. If I go for PF withdrawal now, will I be subjected to a reversal of tax benefits I enjoyed earlier? I am not working currently.

2. From when exactly would the interest in my PF account have stopped? After the completion of 3 years or at the time I transferred the earlier PF account balance?

Thanks a ton...

Also, I was reading this on the web. If I withdraw PF now, i.e., before 5 years of continued service, there will be tax. I worked from June 2006 to June 2009, and then from March 2010 to March 2011. So if I submit my PF withdrawal form now, will I be subjected to tax? I am not currently working.

Implication of Income Tax on PF Withdrawal Before 5 Years

The implication of income tax before the completion of 5 years on the withdrawal of a PF fund is applicable only in the case of a PF Trust. If your employer is contributing and complying with RPFC, then no tax shall be applicable. But if it was a PF trust maintained by your employer, then tax shall be applicable on withdrawal before 5 years.

Thanks.

As long as your PF amount is with the PF authorities, the interest will be paid up to the withdrawal date. Hence, no need to worry.

As long as your PF amount is lying with the PF authorities, the interest will be paid up to the withdrawal date. Hence, no worries.

Dormant PF Rule

This 3-year rule is in place, right?

No interest on dormant EPFO accounts now - The Times of India

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