How can one withdraw money from EPFO?

I resigned from my job in September 2017 and my last contribution to the Employees’ Provident Fund Organization (EPFO) was in August 2017, at the age of 50 years. I joined another job in January 2018 and began contributing to the company’s PF trust. I have not withdrawn any money from the EPFO so far. How long will I get interest on the money deposited with EPFO? How do I withdraw the money from EPFO? Should I transfer the proceeds to the new company’s PF Trust? In case my previous company is non-existent anymore and I am unemployed, how should I go about it? 

                               — P Sudarmani

It is presumed that you are an Indian passport holder. As per provisions of Employee Provident Fund (EPF) scheme, 1952, interest shall not be credited to the account of a member from the date on which the account has become an inoperative account. 

Central government vide Notification no. G.S.R. 1065 (E) dated 11 November 2016 amended the EPF Scheme, 1952, wherein changes have been made in the conditions leading to a provident fund account becoming an inoperative account.  After implementation of such provisions, an account becomes inoperative if no claim has been preferred by the member after attaining the age of 58 years or date of withdrawal, whichever is earlier.  Thus, you will continue to earn interest on EPF accumulations under the previous employer till you attain 58 years of age.

As per the provisions of the EPF scheme, post cessation of employment, a member may withdraw the EPF accumulations from the fund if he is not employed, at any other establishment to which the provision of Employees Provident Fund and Miscellaneous Provisions (EPF ) Act, 1952 , is applicable, in the preceding two months from the date on which the application for withdrawal is made. However, since you have already started the new employment in January 2018, you are not eligible to withdraw the PF accumulation and you may get the PF accumulations transferred to the PF trust under the new employer.

In case your previous company is no longer in existence, and you are also unemployed, then you may apply for the PF withdrawal by submitting the withdrawal application online though your account on the UAN portal.

Also, from a taxability perspective, as per section 10(12) read with Rule 8 of Part A of Fourth Schedule of the income-tax (I-T) Act, 1961, the accumulated PF balance due and payable to the employee i.e. balance to his credit on the date of cessation of his employment, is exempt from tax if he has rendered continuous service for a period of five years or more. In case there is change in employment and the PF accumulations under the previous employer is transferred to the new employer(s), the cumulative period of employment with all the employers is required to be seen for the purpose of evaluating whether the employee has rendered continuous service for a period of five years or more.

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

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