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Should I Keep My Old PF Account Open?

T S Khurana |471 Answers |Ask -Follow

Tax Expert - Answered on Jan 22, 2025

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Question by Ratna on Dec 04, 2024Hindi

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Hi - I worked for a company for about 15+ years and came out in 2017 and started something on my own. My PF account continues to exist with no contributions and interest amount is deposited every year. Questions: 1) Can I continue to keep the account and get the interest deposited till the age of 58. Am currently 50 years old. 2) Is the interest income tax free or taxable? 3) Should I withdraw from the account and invest the funds elsewhere? Please advise. Thank you.

Ans: 01. You may keep your PF Account & earn interest.
02. Interest earned on PF account is tax free, but you have to disclose the same in your ITR.
03. You may withdraw the amount & deposit the same in PPF account, with any bank or Post Office & keep earning interest. This account would be for 15 years & you can get it renewed under certian conditions.
Please note that in case of EPF Interest is not paid after 3 years, if there is no further contribution.
Most welcome for any further clarifications. Thanks

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Hello Sir, Greetings. My name is Anil. I quit my last job in Sept 2021 and did not withdraw my PF amount till today. I will complete my 60 years in the next year. I have a continuous service af more than 22 years all PF account have transferred time to time when I joined the new organization. Please let me know whether I should continue to keep my PF balance in PF account and will I get the interest every year? Also please let me know when should I start with my PF pension? Thanks in advance for your guidance

Ans: Hello;

You should withdraw your EPF corpus immediately and invest elsewhere.

After 3 continuous years of no contribution, except interest, the EPF account becomes inoperative.

If you have opted for deferred pension you may receive EPS pension after completing 60 years of age.

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Asked by Anonymous - Nov 24, 2024Hindi

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Sir, i am planning to quit my job from an mnc and have no plans to work in any company.(planning to start business). Currently I have PF balance of 25 lakhs and wanted to know if its beneficial for me to keep my PF balance in the same account for 3 years (until it earns interest) or should i keep it for more than 5 years(to avoid tax)? Please let me know if i can still earn interest even after account becomes inactive/dormant after 3 years? Total service : 15 years Age:40 Is the entire principal and interest tax free if I keep the amount in pf account for more than 5 years post retirement?

Ans: Hello;

As per EPFO rules an account is deemed dormant if it has no contribution (except interest) for 36 months consecutively.

However due to request from members, EPFO has a current policy to pay interest upto member age 55 followed by 3 grace years i.e. upto age 58.

Yes both interest and principal are tax free.

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Question by Hema - Feb 13, 2025Hindi

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Dear Sir, I am now 60 years old and still employed. My company continues to contribute to my PF as I am still working. I was told that there is no interest for PF 3 years after 58 years age. If I am not getting any interest in my PF account, please advice what I should do. Thanks a lot for your advice. Vijay

Ans: Hello;

EPS closes at 58 but you may keep contributing to pf as long as you stay in active employment.

You will get interest on all your contributions. No need to worry.

Ensure entire 12% of employer contribution is credited to your pf account.

Best wishes

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