The Employees’ Provident Fund Organization (EPFO) has around Rs.27,000 crore lying in inoperative accounts. There are chances that a small portion of this unclaimed money is yours. Many employees feel that the EPF account transfer is a cumbersome process and is a painful experience. It is often observed that we just ignore to transfer the funds to the existing EPF account.
But, things are changing for the better. The EPFO has been implementing good initiatives and you can now transfer your EPF funds online and you can also withdraw EPF funds online.
In case, you have not been contributing to EPF Scheme for a while and has not withdrawn/transfer the funds from your old EPF accounts then there are chances that your old EPF account(s) would have become IN-OPERATIVE.
As per the EPFO’s earlier definition of Inoperative Account – EPFO does not pay interest on the EPF account, where no contributions (no activity) have been received for 36 or more months continuously. EPFO considers this type of account as an ‘Inoperative EPF Account.’
However, during the FY 2016-17, the Ministry of Labour announced that interest will be credited on in-operative accounts too. Since then, there has been no clarity on this topic.
Interest on Inoperative EPF accounts – Latest Update
As per the EPFO, the retirement age of an EPF member is considered as 55 years. The PF body will pay interest on all EPF accounts (if full balance is not withdrawn) till up to the members’ age of 58 years. The rate of interest is as declared by the EPFO from time-to-time (every Financial Year).
New Definition of Inoperative EPF account : As per the amended definition, an EPF account becomes ‘inoperative’ after the age of 58 years i.e., 36 months after the member’s retirement age of 55 years.
Latest Related Article : Why should you Withdraw Old EPF Account Balance? | Consequences for non-withdrawal of EPF balance
So, it is now clear that an EPF account can be classified as Inoperative after the member attains the age of 58 years only.
If you are contributing to EPF Scheme, suggest you to check and verify the correctness of your personal details that are linked to UAN, especially your Date of Birth.
Latest update (16-Nov-2017) : If an employee who is a member of EPF scheme, quits or retires from his employment and continues holding the accumulated PF balance, he/she has to pay tax on interest from the date of unemployment. So, the interest on EPF is tax-exempt only when the member is employed and the Interest credited to an employee provident fund (EPF) account after an individual ceases to be in employment is taxable in his/her hands in the year of credit. Interest that has been accrued post employment is taxable. This is as per the recent order by Income tax appellate Tribunal.
(Source: Times of India & Moneycontrol)
Latest news (26-May-2018) : EPF interest rate for 2017-18. EPFO notifies 8.55% as interest Rate on EPF for the year 2017-18, lowest in 5 years.
Continue reading :
- EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
- How to trace my old & Inoperative EPF account online?
- How to track the status of EPF claims online?
- How to consolidate multiple Old EPF accounts?
(Post published on 25-July-2017)
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Hi Sreekanth,
I want to transfer my old EPF account with my current employer. Interest for FY 2019-2020 has been credited now. If i apply for transfer of account request, will the transfer amount include accumulated interest on old account for FY2020-2021 till the date of request of transfer account?
Dear Sanjeev,
Yes, you will receive the interest amount as well!
Thanks Sreekanth for your reply. This means amount that will be transferred to current account will be more than Closing Balance of the Last Year. Am i right?
Hi Sreekanth,
I am awaiting for your response. Since I did not find answer to my query from many blogs and responses, just wanted to make it sure what you have answered is correct in the other way. Hope you understand… Once again i am reiterating the same as below:
I am applying for transfer of old PF account to the current account. Last contribution made in the old account in Aug 2019. I am applying for transfer request in Jan 2021. Will the transfer amount include accumulated interest from Mar 2020 to Jan 2021 on old account? Since you answered ” I will get the interest as well”. This means to me that Transferred amount will be more than the closing balance of FY2019-2020. i.e. Closing Balance of FY2019-2020 + Accumulated Interest (Mar 2020 to Jan 2021) = Transferred amount to Current Account. Am I right?
Dear Sanjeev ,
Yes, your understanding is correct.
You may request Annexure-K through grievance portal, it will have all transaction statement entries on your EPF account.
Dear Sreekanth,
Thanks for your response. And Yes, I had applied for Account Transfer and the approved amount included interest. This information will be highly useful for others who may be having a doubt over transferred amount just like me. Thanks once again
Hi Sreekanth.
Thank you for this article.
Can i keep money in an EPF account even after 3 years / 36 months ? I understand based on new definition of inoperative account my account won’t fall in this category as i am not near the age of 55 OR 58.
I am currently outside India and will be completing 3 years soon since no contribution been made to EPF account. I understand interest would continue to get credited even in this case.
I would like to understand whether i should continue with my account by keeping funds invested or is there any implication ?
Dear Chintan,
After 3 years of no contributions, the EPF account is declared technically ‘in-operative.’ However it continues to earn interest at the rate declared by the EPFO for active EPF accounts (as per the latest notice). However additional paperwork is required to revive an inoperative EPF account or to withdraw from it.
After 7 years of no contributions, the EPF balance is transferred to the ‘Senior Citizens Welfare Fund.’ In this case, the EPF balance continues to earn interest, but at a different rate from that declared by the EPFO.
You can still claim your money from the Senior Citizens Welfare Fund, but proving ownership becomes a lot harder, especially if your ex-employer has failed to maintain proper records.
After 25 years in the Senior Citizens Welfare Fund (and hence 32 years of no contributions), your EPF balance is forfeited to the Government of India. This event is called ‘escheat’ in legal terminology.
Thank you Sreekanth.
“Additional paperwork is required to revive an inoperative EPF account or to withdraw from it” – please let know whether paperwork is all online OR need to visit an EPFO office in person ?
if you can let know your view whether is it good to withdraw now or continue earning interest from EPFO atleast till completion of 6-6.5 years from the point no contribution has been made ?
Dear Chintan,
Do you have any plans to get employment in India and contribute to EPF scheme again??
Hi Sreekanth,
Yes i do have but may be after 5 years or so.
Dear Chintan,
If you would like to re-invest the epf claim amount in a better way then you can try withdrawing it.
Hi Sreekanth,
Given return from other investments, i think EPF seems better as of now, i will prefer to keep it invested for next 3 years or so i.e till 2024 by that time it will be like some 72 months since no contribution.
do you see any issues in withdrawing at that time apart from some additional paperwork ?
Dear Chintan,
Is your PF maintained by your employer’s PF Trust?
Hi Sreekanth,
Yes it’s maintained by Accenture and has its own trust.
Dear Chintan,
If you are confident that your employer can provide support for EPF withdrawal in future then you may continue holding the funds..
Hello Sreekanth,
I resigned from Infosys and have joined a US based org. For last 3 years Infosys kept on sending emails to withdraw or transfer funds in their trustee PF and threatened that account will become in-operable otherwise. I asked them to abt balance accrued in my PF account but they never replied. Also told them that I do not intend to withdraw funds and I should be able to keep them until 58 yrs of age. But instead they simply credited all the amount in my account which was used as salary account. Seems like they wanted to pay me off to avoid interest payment. Can I dispute this somewhere?
Dear Amankul,
Yes, an EPF member can maintain the funds till the retirement age. As per the EPFO circular, interest is payable even if there are no contributions.
Without you withdrawing the funds, how did they process the claim?
However, do note that the interest accumulated during the non-contribution phase is a taxable income.
Related article : EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
Yeah even I’m lamented tht settlement happened without my consent. No cancelled check was provided for account verification. Have email proofs to back what I posted.
Dear Amankul,
Suggest you to escalate the issue with the internal HEAD of the depts (HR/Finance) @ infosys..
Oh I don’t expect anything from them(esp for ex). For last few years was trying to follow up to get statement of my PF account. No replies, top bureaucracy. Not sure if this can be raised with EPFO commissioner.
Dear Amankul,
Yes, you can escalate this issue .
Hi Sreekanth,
I had 9L+ in my PF account. Out of which I applied partial PF withdrawal for almost the full amount(say 8L+) in Mid-February.
Usually interest gets credited for PF account for APR-MAR window I believe. So my doubt is will interest be applied for that full amount at least till January (From APR 2019 – JAN 2020) ?
Dear Muthu,
For FY 2018-19, the interest would have got credited by now (generally during july to dec)..
Hi Sreekanth,
Yea it got credited for 2018-18 window. I want to know abt 2019-20. I have just applied for almost full pf withdrawal using form 31(for partial withdrawal) 2 days back. So want to know whether interest would be credited for this year 2019-20? Would interest have been accumulated till January?
Dear Muthu ..ideally.. the interest is payable till jan..but will be credited in next fiscal year only..
You may also check with EPFO via this link..
Hi Sreekanth,
I worked in some company A from January 2014 to May 2014. But the final settlement was not done with that company hence my PF is also not credited to my PF account for the may month. Then I joined company B worked there for more than 5.5 years. Company B has it’s PF member ID and UAN is linked with it.
The company A ‘s PF account is not linked with UAN. Now I have applied for the final settlement with company A whose PF account I think is dormant now. If the company A wants to credit the PF of the may month as a part of final settlement, is there any issue ? Now the company A has to create a new member ID ? I don’t want to give them my UAN, as I don’t want the job history of company A to appear in my UAN. Please help me with this.
Dear Sylvester,
If your current UAN is linked to Aadhaar then they may not be able to create new UAN.
Member-Id is nothing but your EPF account, which you may already have right??
You can request your company-A to transfer the funds (PF/EPS) to your latest EPF account..
I have still not received Interest Credit to my PF account for FY 2018-19. Can you let me know when Interest is credited.
Dear Babu,
The interest for FY 2017-18 has been credited during Aug to Dec 2018.
Kindly note that the interest for FY 2018-19 will be credited during Jul to Dec 2019.
Related articles :
* EPF a/c interest calculation : Components & illustration (Employees’ Provident Fund)
* EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
Hi Srikanth,
I lost my job 2 years back. I did not withdraw my EPF corpus then, thinking it’s my savings for retirement. Meanwhile, EPF office has credited interest for FY17-18 in December 2018 with transaction date as 31-March-2018. Since it was way after filing my last year’s ITR, I could not refer it during last year’s ITR.
My questions are;
1. Should I show the EPF interest earned for FY17-18 in this year’s ITR (as the amount was actually credited in December 2018)?
2. If not, how should I handle this?
Note that typically EPFO credit interest for last financial year in the second quarter (Oct-Dec) of current financial year. So I cannot show it in the current year’s ITR (as due date is 31-July). Can I show it next year’s ITR?
Please answer my queries. Thank You.
Dear Vai .. Kindly refer to our discussion on this query @ Forum..
Thank you very much Sreekath for quick response. Your website/blog is very much informative and valuable for all, I highly appreciate your efforts !!
Dear Sreekant,
I left my job on February 1st 2019. what do you suggest that should i withdraw the whole amount or should keep it for 36 months more as it would still earn interest. Also could i partially withdraw some amount as i have a medical emergency.
Also how can I withdraw the whole amount online as i only get the option of form 31 which is for partial withdrawl.
Kindly suggest
Dear Rahul,
May I know your next career move?
As per the latest EPFO notification there is no concept of Dormant accounts. You may get interest beyond 36 months also.
Related article : EPF partial withdrawal options and rules..
Hi Sreekanth,
quit my job in Jun-2016 and i have some amount in my EPF account and i did not withdraw it till now. can i keep that EPF account or shall i withdraw money from it?
when it will become a dormant account and what will happen to dormant account/
Thanks, rams
Dear Rams,
As per the EPFO’s notification issued in FY 16, all in-operative EPF accounts get interest payment from April 2016 onwards.
In your case, you should get the interest amount on your PF balance. Suggest you to cross-check this by submitting a grievance request to the EPFO via this link..
I quit my job from Jan 1st, 2014 at the age of 50, did not take any other employment and withdrew my entire PF ( final settlement ) only in August 2017. I have received interest up to end March 2017. However no interest has been paid for the period April-August 2017.
As I have not yet attained the age of 58,shouldn’t I be getting the interest for the above period as per the Nov 2106 amendment and definition of inoperative accounts ?
Dear PN,
Yes, ideally the interest amount for the said duration is also payable.
You may submit your grievance to the EPFO via this link..
I submitted my grievance on the EPFO link as suggested. They have replied that an account is classified as UDA, 3 years after the last contribution is made and accordingly my account is classified as UDA for the FY 2017-18 and hence no interest would be paid for Apr-Aug 2017.
Dear PN,
The notification regarding payment of interest on EPF accounts came around July 2017 (as given in one of the images in article). But, with retrospective effect from Apr 2016.
Looks like, at the same time you had withdrawn the funds and hence they might be referring to old rules.
FYI, UDA- Unclaimed Deposit Account..
Hi,
I had EPF account with previous employer which had contributions till 2003. I switched job in 2003. New company had PF as exempted trust. I did not withdraw any money from previous (non-exempted) epf account. Now if I wish to withdraw money, until what period, interest will be paid? 2006 as it would have become inoperative from 2006? Or it should credit interest for entire period till today as per new rule?
Hi,
As per the EPFO’s notification issued in FY 16, all in-operative EPF accounts get interest payment from April 2016 onwards.