InvestorQ : Why does the EPFO tax the EPF contribution made by an individual if the contribution is not withdrawn soon after retirement?
leah Diaz made post

Why does the EPFO tax the EPF contribution made by an individual if the contribution is not withdrawn soon after retirement?

Answer
user profile image
SINTU Khan answered.
1 year ago


This is good for self guard and security


user profile image
Nishita Gala answered.
1 year ago


A lot of people delay withdrawing their accumulated amount from the EPF account and the same continues to be a liability for the EPFO. Reports say, the EPFO started doing this to discourage provident fund subscribers from neglecting their EPF accounts, especially the ones in which no contributions were being made at all. Thus, in 2011, the EPFO stopped paying interest on accounts that had been inoperative for more than three years, or 36 months.

However, the rule was changed in 2016, and the EPFO said that inoperative accounts will earn interest till the account holder turn 58. But after the retirement of the account holder, the EPFO will not pay interest if the account becomes inoperative.

Thus, interest earned before retirement will not get taxed irrespective of when it is withdrawn after retirement, but any interest that’s earned post retirement will be taxable in the hands of the account holder.

This is because the exemption is available only to an employee, but once an individual leaves his/her job or retires, he or she does not remain an employee; hence, any interest earned attracts tax.


user profile image
Raj khan answered.
1 year ago


यदि सेवानिवृत्ति के तुरंत बाद योगदान वापस नहीं लिया जाता है, तो ईपीएफओ ईपीएफ योगदान किसी व्यक्ति द्वारा कर क्यों देता है?