For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Why You Should Immediately Withdraw Your PF After Retirement?

|

The interest that employees generate on the Employees Provident Find or EPF as it is popularly known is way higher than that given by banks.

The interest rate for 2019-20 was pegged at 8.65 per cent vs 5.5 per cent being offered by banks. This often leaves employees tempted to keep the retirement corpus with the Employees Provident Fund Organization (EPFO). However, they is not advisable at all.

After retirement you should withdraw your PF

 

The interest earned on the Provident Fund is normally tax free in the hands of the investor. This is true if you have completed five years of continuous service. If you are retired and do not withdraw your PF, the same becomes taxable.

In short, the interest becomes taxable, if you continue to keep the provident fund with the EPFO after retirement. How quickly you should withdraw the same is not defined, but, we would assume that you should do it in a month or two for sure.

Presently, the retirement age is pegged at 58 years. Presently, if you are unemployed then you can withdraw the EPF balance within two months of being unemployed.

In case you are unemployed and decide to withdraw the money the interest would not be taxable, if you have completed 5 years of service. Investors must understand the tax implications before they decide to withdraw their EPF.

Why You Should Immediately Withdraw Your PF After Retirement?

Also, if possible one must contribute a higher sum, through the VPF as the interest earned on the balances is currently 8.65 per cent, which is way higher than what banks in the country are offering.

Amounts can be withdrawn from the EPF for emergency purposes as well, including specified reasons like buying a house, marriage purposes, illness etc. However, if you want to build a corpus through the EPF it is advisable not to withdraw the amount. The contribution is largely for an individual to take care of his needs post retirement and hence one should touch the EPF amount only in case of an emergency.

Read more about: investment investments pf epf
Story first published: Thursday, October 8, 2020, 9:19 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X