Once an EPF or employee provident fund account becomes inoperative, no interest is credited further from that date. Until such time, interest will continue to accrue on provident fund, but no interest will accrue once the account becomes inoperative. According to the rules of retirement fund body EFPO, the subscriber's EPF account does not further interest in these situations:
-if an employee retires from service after 55 years
-if the subscriber migrates abroad permanently
-if the subscriber passes away
- if no claim has been received for settlement for 36 months from the date when the amount became payable on cessation of employment (In other words, the subscriber does not apply for withdrawal of his accumulated balance within 36 months of quitting the job. But until such time (36 months), interest will continue to accrue on the PF balances.)
It has to be noted that if the accumulated EPF balance payable to the employee is exempt from tax if he has rendered continuous service for a period of five years or more.
In cases when the employee has rendered services at different organizations, if the EPF balances are transferred to the account it is considered that the employee has has rendered continuous service for a period of five years or more for taxation purpose.
If there is no new contribution to the EPF account, then the account becomes inoperative but still continues to earn interest. However, the accretion to your PF balance after will be taxable in subscriber's hands. Taxes may be paid by way of advance tax or self-assessment tax, as applicable.
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