How is 5 years continuous contribution for EPF calculated when there is gap between jobs

Hi Karthik,

Great question — this is a common doubt for professionals who’ve had gaps between jobs or worked with non-PF employers. Let’s break it down clearly in the context of both:

📌 1. 5 Years of Continuous EPF Contribution — How Is It Calculated?

✅ Key Rule:

For EPF withdrawals to be tax-free, you need:

• 5 years of total (not continuous) contribution, and

• No break in the PF account itself (i.e., you didn't withdraw or close the PF account during gaps).

🧾 Your Timeline:

➡️ Total EPF contribution period: 5 years, 1 month

❓ Does the Gap Break the 5-Year Rule?

NO, it does not break the rule, if you transferred the old EPF account to the new one and did not withdraw the balance in between.

✅ Since you transferred the PF, and did not withdraw or close the account during the gap, your total contribution period counts as 5+ years, even with the break.

✅ EPF Withdrawal — Tax-Free?

Yes, since:

• You contributed for 5+ years, and

• You didn’t withdraw or break the PF account in the middle

➡️ You can withdraw your EPF amount tax-free if you leave your job at the end of 2022.

🔁 EPF to NPS Transfer — Tax-Free?

Yes — under Section 10(12) and Section 80CCD(2):

• EPF to NPS transfer is tax-free, provided:

  • You have completed 5 years of service, and

  • Transfer is done via proper procedure (through your employer and EPFO/NPS route)

➡️ In your case, you are eligible, since the PF account was active and transferred, and you’ve crossed the 5-year contribution threshold, even with the gap.

⚠️ Important Notes:

• If you had closed the PF account after your first job and withdrawn the amount, then the clock would have reset, and you'd not qualify for tax-free treatment.

• Always retain transfer proofs and passbook records showing continuity.

✅ Summary: