What happens to your EPF Account after 3 years of leaving your job? Know here 

EPF Account : Big news for EPF account holders. Stopping contributions to the Employees’ Provident Fund (EPF) can stunt your retirement growth and impact long-term savings if not managed properly. When you leave a job that deducts EPF , or join a job that doesn’t, your contributions stop. However, your EPF account remains active for a period and continues to earn interest during that period.

Interest on inactive accounts

If no contributions are made to the account for 36 months (three years), the account becomes inactive. Until then, interest continues to accrue at the prevailing interest rate. After three years, new interest payments cease. However, your deposit remains safe and you can withdraw it whenever you wish, depending on your eligibility. This means the money doesn’t disappear; it just stops growing.

Withdrawal and tax implications

If you are unemployed for more than two months, you can withdraw your EPF. However, if you haven’t completed five years of continuous employment, EPF withdrawals are taxable. Both employee and employer contributions and the interest earned on them are taxed according to your income. However, if you leave the money in the account and it continues to earn interest, it is not taxable.

Transferring EPF

It’s better to transfer your EPF account when you change jobs, rather than closing or abandoning it. With a Universal Account Number ( UAN ), you can link all your EPF accounts and easily transfer balances through the EPFO ​​website. This keeps your service information in one place, ensures continued tax benefits, and allows your savings to grow.

Why not ignore the EPF account?

Not contributing to EPF can weaken your long-term wealth and retirement fund. Missing interest and tax savings can significantly reduce your retirement corpus. Old or forgotten EPF accounts can also be difficult to withdraw later if your KYC or bank details are not updated.