No time limit for keeping PF account with old employer

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I will turn 57 soon. I have been a member of the Employees’ Provident Fund (EPF) since October 1986. I worked in one company for 31 years and was jobless for 45 days before I joined another company. After working there for three years, I resigned in March. I have transferred my corpus from the first company to the second one, where the PF is managed by a trust. For how long can I keep my corpus with the company if I don’t join another job? Can the employer force me to withdraw the money immediately? Can I keep it for 36 months without any further contribution and still get interest on the corpus?

—Srinivas

As per existing provisions of the Indian PF law, there is no upper time limit prescribed for keeping the PF account with your previous employer and the same may be continued to be maintained. However, a PF account becomes inoperative and does not earn further interest when an employee retires from service after attaining the age of 55 years or migrates abroad permanently or dies and does not apply for withdrawal of his accumulated balance within 36 months. Until such time, interest will continue to accrue on the PF balance. In your case, you have ceased employment after completing 55 years of age and no contributions have been made thereafter. Therefore, you should be able to earn interest in the PF account up to 36 months from the date of leaving your previous job.

However, as your corpus is maintained with the private PF trust of your employer, specific rules of the trust deed would need to be further reviewed to comment on the implications in your case.

Are gifts by married / unmarried daughters to their parents taxable?

—Vinod Kumar

Where a gift is received by the parents from a specified relative (ie daughter), the transaction of the gift itself will not give rise to any income tax implications in the hands of both the receiver and the daughter. It would be advisable for any such gift to be documented in a legal document viz. a gift deed and placed on record. Also, depending on the assets being gifted, stamp duty implications may also need to be examined separately.

Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.

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