PF interest stops: Big Alert from Karma in the circumstances interest stops
Contents News/Article Date: 15th September 2022
Relating to which Act: The Employees Provident Funds & Miscellaneous Provisions Act, 1952
Type: BL News item
Relevance of this news: As we all know that under the Provident Fund and Employee State Insurance Corporation Act, it is mandatory to provide some contributory and health care benefits to employees for which there is some percentage contribution on the part of the employer towards each and every employee who is eligible for this purpose in the immediate and long-run while in tenure of service. These are also known as social security benefits that are governed and managed by Government bodies as per rules and regulations laid down and understood by all employers applicable by these Acts.
Karma does a lot of work on PF & ESI and especially under the PF act, there are a lot of chapters and sections, and sub-sections against which obligations are required to be fulfilled by employers and employees. Karma takes care of all the obligations for the establishments as well as members of the Fund and abides by its rules and regulations with the assistance of its trained staff who have been in service with Karma for many years.
In this instance, it is related to the active and inactive period against which interest is accrued on the member’s PF accumulated amount and up to what period the money can lie there after retirement once the contribution stops.
Subject: PF Interest Stop: Big Alert! In these circumstances, interest stops on the amount deposited in PF, know details
For greater details, appended below is the complete news item
PF interest stops: Big Alert from Karma in the circumstances interest stops
Provident fund is mandatory for employed people in the organized sector. The good thing is that you get a lump sum amount after retirement. However, if there is no need for the funds immediately for any kind of use, there is an option to hold back the withdrawal for a period of 3 years in which you will continue to get interested in it for this period of time.
For example, you attain the superannuation age of 58 years and as per the company’s policy you are supposed to retire, after withdrawal of Pf money your account will be closed, however, if you do not withdraw and let your account remain as it is, in this case, you will continue to earn interest for the period of 3 years and if you still do not withdraw after 3 years, then your account will become inactive and you will not earn any interest.
Suppose you leave the job at the age of 52, and you are then unemployed without any remittance of PF contribution happening into your account, then also you will continue to get interested in the PF amount for the next 36 months. After that, the account will become inactive.
Even if the PF member permanently settles abroad, your account will become inactive and you will not get interested.
Even if the EPF account holder dies, the PF account becomes inactive and interest on it stops.
Till the time you are on the job, no tax is levied on the interest earned on the PF account. However, after leaving the job or retiring, the interest earned starts taxing.