Re-investment of EPF Withdrawal amount

Q & A Forum › Category: Investments › Re-investment of EPF Withdrawal amount

Abs asked 8 years ago

I and my spouse are in our early 40's and have retired from our respective corporate jobs. We will not be taking up salaried jobs anymore. My EPF service period is close to 13 years and my wife's service period is 4 years 6 months. Questions: 1) Since 2004, I have being transferring my PF to the new companies that I have joined. How does the PF department calculate the total service period? Is this a manual verification process because the UAN portal does not show the previous history? 2) We wanted to use our PF money for long term wealth creation (Least risk option). I read that if a person is not continuing to be salaried (which means no more contributions to the EPF account), then the interest that is accumulated in the PF account from that date is subject to Income tax deduction. Is this true? If that is so, will it be prudent for me and my wife to withdraw the money from our PF accounts and invest elsewhere? 3) Where elsewhere if we withdraw? (Least risk option for long term wealth creation). Thanks a lot Ab

3 Answers

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Sreekanth Staff answered 8 years ago

Hi, 1 - If the TRANSFER of Funds have been successful, your service period would have been carried forward till the last EPF account. You can request for Annexure-K from the EPFO which gives you the required information. You can submit a grievance request to the EPFO regarding this at http://epfigms.gov.in/ 2 - Kindly go through this article ; EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable? 3 - May I know your investment objective(s) and time-frame?

Abs replied 8 years ago

Hi Sreekanth,

This is great. Thanks for the information and guidance with respect to 1 and 2.
3. The investment objective is to generate a monthly income for us after 60. We initially had the intention of keeping our EPF growing until the age of 60 but now that the interest income from this year will be taxable for both of us from this year, we would like to withdraw and invest in an instrument which is low risk and tax friendly. The timeframe is 15- 20 years.

Thanks,
Ab

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Sreekanth Staff answered 8 years ago

Hi, PPF is a better option - low risk & tax friendly, but one can invest more than Rs 1.5 Lakh pa. There are options for low risk in Debt category but not tax friendly. However, if you would like to take some risk, you can consider Debt Funds / Hybrid mutual funds which are tax efficient when compared to Bank FDs/RDs. Kindly read :

List of Best Investment Options in India

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Abs answered 8 years ago

Thanks a lot Sreekanth. This is great !!

Abs replied 8 years ago

Hi Sreekanth,

I submitted the request for annexure – K from the following website: http://epfigms.gov.in/ but got the below reply from them:

The Transfer Claim Form Form 13 from the Member id: xxxxxxxxxxxxxx for transfer of PF accumulations is not received in this Office yet.Without receiving FOrm 13,this office is not able to provide Annexure k copy as per request of member.

Is there something that I missed?

Thanks,
Abs