Will You Get Interest if Your PF Account Becomes Inoperative? Complete Information

EPFO New Facility: Many employees wonder after changing or leaving their jobs whether their Provident Fund (PF) account will continue to earn interest. However, the Employees’ Provident Fund Organisation (EPFO), the institution that manages PF accounts, provides special facilities to employees. There’s a common misconception that interest stops accruing in a PF account after 3 years of leaving a job, but this is not true. According to the rules of the Employees’ Provident Fund Organisation (EPFO), if your PF account is linked to your Universal Account Number (UAN), interest will continue to accrue even after you leave your job.

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Interest Status on PF Account After Leaving a Job

According to EPFO, even if you don’t make any new contributions, interest will continue to be added to your PF balance every year. This interest will continue until the employee reaches the age of 58 or the entire amount is withdrawn. After leaving a job, the PF account is considered active for 36 months. After this period, the account moves to the inoperative category, but this does not mean that the interest stops. Even on inoperative accounts, interest continues to accrue at the rate declared by the EPFO. For the financial year 2024-25, this rate is 8.25 percent.

Tax Rules on PF Interest

However, the PF interest earned after leaving a job is taxable. It is considered income from other sources. If the annual interest exceeds Rs. 50,000, then TDS (Tax Deducted at Source) is applicable.

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Process to Link PF Account with UAN

EPFO has provided the ‘One Member, One EPF Account’ facility. The purpose of this is to allow employees to link their old PF accounts with their current UAN. This consolidates all old accounts in one place, making it easier to track interest. It also prevents any difficulties in future withdrawals or transfers. Employees can easily check their PF balance and interest information by viewing their passbook through the EPFO member portal or the UMANG app.

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Adarsh P