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Can I keep my EPF account operational and earn interest post-retirement?

Once a PF account becomes inoperative, it does not generate any interest income thereafter (Photo: Rituparna Banerjee/Mint)Premium
Once a PF account becomes inoperative, it does not generate any interest income thereafter (Photo: Rituparna Banerjee/Mint)

  • An EPF account becomes inoperative and does not earn further interest, once an employee retires from service, migrates abroad permanently or dies and does not apply for withdrawal of his accumulated balance within 36 months

I retired at age of 64 years in March 2019. I kept my employees' provident fund (EPF) account operational without any additions. The three-year period allowed to keep the account open without additions ends on 18 March 2022.

I have the following queries:

1) Can I extend my EPF account beyond three years without any additions to the account?

2) I need to close the account on 18 March 2022. In this case, how will the interest for the 2021-22 period get credited to my account, as the rate of interest is generally decided in April, and my account would close a month before that?

3) When do I submit an online application for account closure -- on 18 March 2022 or before that date?

- Anonymous

As per the existing provisions under the Indian Provident Fund (PF) law, an EPF account becomes ‘inoperative account’ and does not earn further interest, once an employee retires from service after attaining the age of 55 years, migrates abroad permanently or dies and does not apply for withdrawal of his accumulated balance within 36 months.

Until then, interest will continue to accrue on the PF balances, however, no interest will accrue once the account becomes inoperative.

In your case, as you have retired after completing 55 years of age, you shall receive interest up to 36 months from the date of your retirement. It may be noted that post completion of the above referred 36 months, it is not mandatory to close your PF account. You can keep the account open.

You may choose to make an application for withdrawal of the PF balance in your account at your convenience even after 18 March 2022.

Further, just to clarify, in case you choose to apply for the PF withdrawal in March 2022 and the PF authorities have not announced the interest rate for FY 2021-22, you shall receive the interest up to the date of withdrawal, as per the last announced PF interest rate.

(Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.)

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