A new notification came, which reads that if an employee resigns from his job, his EPF account will be “operative”, however, will earn an interest until he applies for withdrawal.
Also, the Income Tax Appellate Tribunal (ITAT) upheld the matter of a retired employee where the employees who retires after 55 years of age and then post three years from the date of retirement, his EPF account is treated as “inoperative” and does not earn any interest.
Hence, this notification is applicable for both retired employee and for those who have quit employment for various reasons.
The applicable interest for the financial year 2016 – 17 was 8.65%. For the current year the interest rate will be announced shortly.
EPF is the most important investments made by a salaried individual during his or her term of employment. This scheme is managed by the Employees’ Provident Fund Organization (EPFO) which is a statutory body formed under Employees Provident Fund and Miscellaneous Provision Act of 1952. The EPF account not only comprises of the contribution made by the employee but as a statutory rule, every organisation which employees more than 20 employees under its payroll are required to register with EPFO. This means both the employee as well as the employer makes a contribution to the EPF account. The EPF not only serves the purpose of a retirement scheme but also works as a saving scheme that can be used at the emergency.
To know more about EPF Withdrawal Rules visit https://rupeenomics.com/epf-withdrawal-rules.