Continuous service for EPF

POSTED BY Amit ON July 16, 2012 10:28 pm COMMENTS (5)

Hi Manishji,

I just want to thank you for the great work you are doing – that of creating financial awareness.
Your site is just awesome.

I have a question regarding EPF. I worked in company A from Nov,2008 to January,2012. My last working day in January,2012. So my total working tenure 3 years and 3 months. I had opened an EPF account there.

a) Say I do not work again anytime as I have started my business .My EPF account will complete
5 years in Nov,2013. If I withdraw money after Nov,2013 ,will it be taxable. Will that be
counted 5 years of continous service ?

b) Say I get a job after 1 year ,say from January ,2013. and I join another company and transfer
my EPF account there. Now there is a gap of 1 year between 2 jobs. Now to count the
continuous service,will the years with my first co be added to my second company. And also
the 1 year gap ,will it be also taken into account ?
The reason I am asking this is if my first co’s years are not going to get added to my second
co’s years,isn’t it prudent to withdraw my EPF.

Thanks.

Regards,
Amit.

5 replies on this article “Continuous service for EPF”

  1. Amit

    Yes , even if the gap is 2 yr or 3 yr , that does not matter, even if the account is more than 3 yrs and got dormant, it will just not get the interest credited , thats all ,

    Later when you transfer , all they will see is that it was active for 3 yrs in start and then it will continue from there. .

  2. Amit S says:

    Also lets say if my gap goes more than 3 years and the EPF account goes dormant and then if I start a job with same EPF accoun t, wii the first 3 years be counted ?

    Regards,
    Amit.

    1. Dear Amit, irrespective of the in between GAP, the 3Y period with prev. employer ‘ll remain as it is. As & when you join a new employer, you w’d have to complete another 2Y to complete that 5Y service period.

      Thanks

      Ashal

  3. Amit S says:

    Anshal,

    Thanks for your quick answer. I just want to confirm that because there is a gap of 2 years in between , when I join new employer, the previous 3 years of exp will still be counted right and added to my new employer exp ? or is it that because of the gap of 2 years , the previous 3 years will not be counted ? and after 2 years with the new employer,my EPF will be non taxable ?

    Regards,
    Amit.

  4. Dear Amit, in your case, if you opt to withdraw your EPF now, it’s taxable. if you opt to transfer it in future to your new employer, past 3Y of prev. employer & then 2Y with new employer ‘ll make it eligible for 5Y, The gap period ‘ll not help to make it 5.

    To withdraw or not ‘ll be personal call.

    Thanks

    Ashal

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