No time limit for closing the EPF account

I worked in an organization for 15 years and had to quit my job for personal reasons in May 2018. I have not yet withdrawn the employee provident fund (EPF). How many years can I keep the money in this account after leaving work? Is the account blocked if it is not operational for a period? Is there an option to make a partial withdrawal? If so, what is the procedure? For how many years after an employee has left their job, is interest paid on the amount accumulated in the EPF account?

—Deepali Srivastava

There is no prescribed period within which you are obliged to close your EPF account. You can choose to keep the account open as needed.

There is no concept of blocking the EPF account under the existing provisions of the Indian Provident Funds (PF) Act. But these accounts become inoperative and no longer earn interest when an employee retires after reaching the age of 55, migrates permanently abroad or dies and does not request the withdrawal of his accumulated balance within 36 month. Until then, interest will continue to accrue on the EPF balances. But no interest will accrue once the account becomes inoperative.

If you have not reached 55 years of service and have not emigrated abroad, you will receive interest until the age of 58, after which the account will become inoperative.

Regarding the withdrawal, in the normal course, you can only withdraw the entire EPF balance and not the partial balance.

However, there are prescribed goals in the provident scheme for which an individual is allowed to withdraw the PEF balance in accordance with the conditions prescribed in this regard.

Can we contribute to the accounts of the Public Provident Fund (PPF) of two minors from a Hindu Undivided Family (HUF) account? On contributions up to ??1.5 lakh per year, is the benefit under section 80C applicable when filing HUF tax return?

—Name hidden on request

There is no restriction on who can contribute to a PPF account.

From a tax deduction perspective, in accordance with the provisions of Section 80C of the Income Tax Act 1961, a HUF may claim a deduction for membership in a PPF account on behalf of any “member” of it.

The maximum deduction under Article 80C of the Informatics Act is limited to ??1.5 lakh.

However, the IT Act does not define the term “member” of a HUF.

Therefore, this would be guided by the general principles of Hindu law, regarding the inclusion of minors as “members” of the HUF.

Parizad Sirwalla is Partner and Head, Global Mobility Services, Tax, KPMG India.

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