Many Indians who have decided or are planning to move abroad have worked in the country at some point in time. Additionally, they would have made investments and would be unsure as to what would happen to them when they change their residence to another country.
Here is an understanding of what would happen to one's EPF and PPF accounts:
Employees' Provident Fund (EPF)
If you are eligible for the provident fund under your employment, before you move abroad, you can withdraw the amount accumulated in the EPF account and close it. Although a subscriber is only eligible to claim the full amount on attaining 58 years of age or on retirement, those planning to quit their job in India and relocate to a foreign country can also withdraw the complete amount.
It is advisable to get this done before you leave the country because if there are contributions are not made to the account for three years in a row, the account will be considered as inoperative.
To apply for the withdrawal:
- One can obtain the EPF withdrawal form from the employer or download the form from EPFO portal and submit it at a PF office
- If your UAN (Universal Account Number) is linked to Aadhaar, you can apply for withdrawal online under the Aadhaar-based withdrawal form
- You can apply for withdrawal through the portal online
If you planning to move abroad for a short period for employment purposes, you may be required to enroll and contribute to the social security scheme there. This will seem unnecessary especially considering your plans to stay there for a short period. You will need to get a Certificate of Coverage (COC) from the EPFO (Employees' Provident Fund Organisation) in this case.
A COC is meant for those who are going on assignments to a country with which India as an operational Social Security Agreement. They are exempt from contributing towards a social security scheme that exists in that country if they have a COC and will avoid the dual contribution in India as well as the host country.
India has the agreement with these 18 countries: Belgium, Germany, Switzerland, Denmark, Luxembourg, France, South Korea, Netherlands, Hungary, Sweden, Finland, Czech Republic, Norway, Austria, Canada, Australia, Japan, and Portugal.
This will save the money of both the employee and the employer. However, the contributions towards the Indian EPF account has to continue to be active.
Public Provident Fund (PPF)
If you have started a PPF account, you should know that only Indian residents can open one and one has to wait till maturity (15 years since the day the account was opened) to withdraw it.
An NRI (non-resident Indian) who has a PPF account that was opened when he/she was a resident in India, cannot make any contributions towards it after moving abroad. As for the contributions already made, one will have to wait until the maturity of the fund to make the withdrawal. Your contributions will continue earning interest till the maturity.
While the interest earnings won't be taxable in India, you will have to find out your tax implications in the country you chose to settle down based on their rules regarding foreign investments.