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Photo: Mint (Mint)
Photo: Mint (Mint)

You can withdraw previous PF corpus if current employer doesn’t support it

Any income accrued over and above is taxable as income from other sources in the year of accrual

I am 52 years old and a US citizen working in India. My previous company contributed to my Employees’ Provident Fund (EPF) for 15 years. There hasn’t been any fresh contribution since the past one year, and my current organization also does not contribute towards PF. Can I withdraw my PF? If not, and since I am an international worker, will interest accrue in it? If, yes, then till what time? Also, will the principle and interest be taxable, assuming at the time of the withdrawal I am a resident Indian.

—Rajesh Mehta

You can withdraw your PF with the previous organization as you are no longer in employment with them and your new organization does not support PF deduction. if you don’t withdraw the PF, it still continues to earn interest. At the same time, it will be taxable as there is no active contribution. The value of the PF at the time of leaving the previous organization is the exempt income as you have completed five years of service. Any income accrued over and above is taxable as income from other sources in the year of accrual.

I want to build a retirement portfolio of 5 crore in the next 30 years. As I am planning for the long term, I have created my portfolio around large-cap and multi-cap funds. My investments are: 4,000 each in Tata India Tax Savings and Mirae Asset Large Cap Direct; and 2,000 each in Axis Focused 25 Direct Plan Growth and Axis Bluechip Direct Plan. I also invest 10,000 per month in National Pension System (NPS). Am I on the right track?

—Name withheld on request

Your savings of 22,000 will become a corpus of 79.2 lakh over 30 years. Considering an average annual earning rate of 10%, the corpus becomes 5 crore. The portfolio allocation is primarily in equities and that is in order as your investment horizon is long term. However, you may reduce one of the two large-caps and instead add a large-and-mid-cap fund for which you can consider Mirae Asset Emerging Bluechip fund.

Surya Bhatia is managing partner of Asset Managers. Queries and views at mintmoney@livemint.com

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