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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jun 30, 2025Hindi

Sir, I had resigned from a State Government job in 2021 and my NPS contribution too stopped, but since March, I got some amount credited in my previous salary account which I thought initially was some arrears for COVID times. In April and May, I got NPS contributions too and now I am worried about what I should do.

Ans: You’ve done the right thing by bringing this up early. Let’s look at your situation step-by-step and address it from all angles.

? Acknowledge the Situation First
– You resigned from your government job in 2021.
– You assumed your financial relationship with that employer had ended.
– However, your old salary account recently got some credits.
– These included salary-like payments and even NPS contributions.

This is unusual and deserves immediate attention. Ignoring this may lead to tax issues or legal confusion later.

? Check the Nature of the Credits
– Are these amounts salary arrears, or a clerical error?
– Get the bank statement and note all credit details.
– See if these carry any reference like “arrears,” “salary,” “settlement,” etc.
– If your PF/NPS number is still active, login and check the source of contribution.

Sometimes, government departments process arrears very late — especially post-COVID. But it's also possible your resignation wasn't fully processed in some systems.

? Was the NPS Contribution Made by Employer or by Govt Error?
– Log into your CRA (NSDL or KFinTech) NPS portal.
– Check who made the April and May contributions.
– If it's tagged under "employer" contribution, your employer may still show you as active.

This is very important — because if that’s the case, then you’re still on the payroll on paper.

? What You Should Do Immediately
– Contact your previous department’s accounts or treasury officer.
– Also speak to your Personnel/HR officer.
– Ask for a clarification in writing about the recent credits and NPS contribution.
– Explain that you resigned in 2021 and do not intend to claim any salary or benefits post-resignation.

It’s crucial you do this in writing to protect yourself.

? Tax Implications If You Don’t Act
– These credits may be shown under Form 26AS as “salary received.”
– If not corrected now, you may be asked to pay tax on these “extra” earnings.
– NPS contributions (government portion) made in your name could also complicate pension calculations.

Even if it’s not your fault, the tax department will look at your Form 26AS and AIS data — not your intention.

? Impact on Future Employment / Pension Eligibility
– If your previous employer shows you as active on paper, it may affect future pension claims.
– It could also confuse any new NPS account (if you’ve opened one after resignation).
– And if you're planning to withdraw NPS, the system may block withdrawal — assuming you're still employed.

This is why resolving it now is vital — even if the amount is small.

? What to Ask the Department
– Clarify whether your resignation has been officially closed in their records.
– Ask for a “Service Closure Certificate” or “No Dues and Final Exit Order.”
– Request an official correction in payroll records if they still show you as working.
– Also ask them to reverse the NPS entries (or formally close your NPS account under exit rules).

If they find it was a mistake, they may reverse the entries and adjust the records.

? Handling the Amount Received
– Do not spend this amount for now.
– Keep it in a separate savings account or FD.
– Once clarified, they may ask you to return the funds — especially if paid wrongly.
– Or they may send a tax corrected TDS / Form 16 reflecting proper classification.

If the amount is legally yours, then only you can use it. Otherwise, they may initiate recovery.

? What Happens to NPS Corpus Now
– If you’re not contributing anymore, you can let the corpus grow.
– However, after resignation, you’re eligible to exit from NPS — partially or fully.
– You may choose to keep it till age 60 or withdraw as per NPS exit rules.
– But since new contributions were made recently, your exit may now be blocked until this issue is sorted.

So clear this with NSDL/KFinTech and your employer first.

? Final Insights
– This situation is not uncommon in public sector institutions with slow updates.
– But it’s important you take control of the narrative and clear your records.
– You should not be held responsible for future legal or tax issues caused by payroll errors.
– As a next step, get all your past resignation and settlement documents in place.
– Also track all bank credits and create a clear file of events to share with the department.

Taking action now will save you a lot of complications later.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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