24 June 2020
Today, in year 2020, I am 37. I started my epf contribution at the age of 31. My queries are below:
1. If I am still working in 2021 and contributing my epf (including employee contribution, employer contribution and VPF), can I withdraw all of my corpus from epf, including the one I contributed in 2020 while I am still working with the same organization, and all of that is tax free? 2. Let's say in year 2022, at age of 39, I stop working and I do not join any other organisation. If I do not want to withdraw my whole epf balance till the age of 58, can I continue earning interest on all of corpus (including epf and VPF) when I am not working (which means I am not contributing to EPF from year 2022)? Is that interest accrual tax free? In my opinion, interest accrual is not tax free after one stops working and stops contributing to EPF 3. Let's say in year 2022, I go abroad and become nri. This means, my epf contributions have stopped. Assuming the interest accrued is taxable after the contributions stop (even if one is nri and working abroad), would it be fine if I become an employee (on papers) of any company in India at very little basic salary of 10000 per month (against say 3 lakh basic per month in my previous job in India) and they keep contributing to my epf. The aim is just to keep earning tax free interest accrual on the existing epf corpus if I choose not to withdraw EPF corpus when I quit my job in India and shift abroad and become nri. Can the income tax department question it that how come i am an nri and stil employed in some company in India at such low salary? 4. Let's say in year 2022, I quit my job and shifted abroad (stopped epf contributions). I didn't withdraw my accumulated corpus. Now, assuming my accumulated corpus is earning interest but taxable. In year 2024, I again came back to India and started working and started contributing to EPF on the same UAN. Now, will the interest earned on the total corpus, assuming that was taxable between year 2022 and 2024 because I was not working in India and not contributing to EPF, will the interest accrued will now become tax free on the total accumulated corpus till 2024 with effect from my job joining date in 2024?
24 June 2020
If you want you can withdraw full amount
Else you can keep it for retirement benefits.
In the future if you don't work then you will get good amount of salary in the form of pension
If you become NRI then interest will be liable for TDs deduction under section 195
Keeping PF has good benefits than withdrawal since the main motive of PF is to protect you from financial problems at the older age
CAclubindia
