Home >Money >Personal Finance >A PF account earns interest in event of no fresh contribution

My previous company in January 2019 had initiated the process to transfer the provident fund (PF) amount to my new employer from their PF trust. I received Annexure K with a date of 23 January. But the credit in my new PF account, which is not under a trust, happened on 13 December 2019. Will I lose interest on the transferred amount for the period of 11 months.


In the event of no contribution to the PF account, the account continues to earn interest and there will be no loss on account of interest. There was a rule earlier, which said that in the case of no contribution for 36 months, the PF account gets inoperative, and therefore, will not be earning any interest. However, the rule has since been modified, and now interest is earned in the account even if there is no contribution.

But it is good to check the reason for the delay in the transfer, as with no active contribution, the interest earned for the interim period—23 January 2019 to 13 December 2019—becomes taxable.

I have a Public Provident Fund (PPF) account in Post Office, which was opened on 5 February 2005, and it matured on 31 March 2020. I have not submitted Form H for its extension for five years. Can I submit it now, and will I get the same interest, which I was getting in the last 15 years? Also, can I withdraw the full money during this extended period? Can I extend it for another five years after the call completion of this period.


A PPF account is for a tenure of 15 years, and at maturity, it can be extended for a block of five years. It can be extended for any number of blocks of five years and there is no limit on the number of such blocks.

Post maturity, Form H has to be submitted for extension of the account. This form is to be submitted within one year of the date of maturity and at the time of each extension. In case it is not submitted within the stipulated time, any fresh deposit done will not be eligible for tax saving and will also not be earning any interest.

And once extended, a depositor can withdraw money from the account subject to one withdrawal per year, and in the complete block of five years, the total withdrawal cannot be more than 60% of the balance at the start of the block.

The interest rate remains the same and the tenure is not the criteria to determine the interest rate.

Surya Bhatia is managing partner of Asset Managers. Queries and views at

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