EPFO members alert! Check how long your Provident Fund account will continue to earn even if you are not contributing money to it
EPFO News: The Employees Provident Fund Organisation (EPFO) member is entitled for Employees Provident Fund (EPF) account if he or she is working in the private sector drawing a minimum monthly salary of Rs 15,000.
EPFO News: The Employees Provident Fund Organisation (EPFO) member is entitled for Employees Provident Fund (EPF) account if he or she is working in the private sector drawing a minimum monthly salary of Rs 15,000. However, there are some conditions in which one can go for the EPF withdrawal that includes instances like job loss, job switch, etc. However, there are a good number of cases in which the EPF account has been left unclaimed as people don't look at their EPF account after the case of job loss or job switch. According to tax and investment experts, one's EPF account continues to earn till the EPF account holder becomes 58 years of age. This happens through the EPF interest getting accrued in one's EPF account.
Speaking on the EPF interest credit rule in one's EPF account SEBI registered tax and investment expert Jitendra Solanki said, "It has been noticed that EPF balance goes unclaimed after the job loss or due to the job switch. However, for information to the EPF account holders, one's EPF account continues to earn even when there is no EPF contribution coming into the EPF account. So, in case if someone has lost one's job and is facing financial crisis, one should try to find other ways instead of EPF withdrawal as it should be the last option. By doing this, one would be able to let one's retirement fund intact and the fund would continue to earn even when the EPF account holder is not earning."
Advising EPF account holders to continue with the same EPF account at new recruter instead of opting EPF withdrawal Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "In the case of job switch, it's advisable to carry one's EPF account at the new recruiter. This will help the EPF account holder to remain eligible for the Pension Benefit as one's EPF account gives EPS benefit too. This EPS benefit is given to those EPF account holders who continuously maintain one's EPF account for at least 20 years."
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Elaborating how one's EPS account benefit comes and how the wealth gets accrued in this EPS account Jhaveri said, "As per the EPFO norms, an employee contributes 12 per cent of one's basic salary as EPF contribution in one's EPF account and the recruiter too contributes same 12 per cent in the EPF account. But, out of 12 per cent recruiter's deposit, 8.33 per cent goes into the EPS account while the rest 3.67 goes into the EPF account."
Both Jhaveri and Solanki said that the above-mentioned rules are applicable when the EPF account is active. However, in the case of EPF account being inactive as neither employee nor the recruiters' deposit is coming in the EPF account. In that case too, the yearly EPF interest rate announced by the EPFo will get accrued on the EPF balance and this will continue till the EPF account holder turns 58.
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