Millions of Employees’ Provident Fund (EPF) subscribers often wonder what happens to their PF balance after leaving a job. A common concern is whether interest will continue to accrue on their PF deposits once contributions stop. The latest EPFO rules for 2026 have clarified this issue.
1. Interest Continues After Leaving JobEven if you quit your job and no new contributions are made to your account, interest on your PF balance will continue. Your savings will grow based on the interest rate announced by the government each year—for example, 8.25% for FY 2024-25. This ensures financial security and prevents your savings from stagnating during periods of unemployment.
2. Inoperative AccountsPreviously, a PF account would become inactive if there were no transactions for 36 months. Under the new rules, interest will continue to accrue until you reach the official retirement age of 58. After that, if you do not withdraw the balance, your account is classified as “inoperative,” and interest will stop.
3. Tax on Interest After Leaving JobA key point that many employees overlook is taxation. While interest earned on PF during employment is largely tax-free (up to certain limits), interest earned after leaving the job will be taxable.
These updates give employees a clearer picture of how their PF savings grow, even after leaving a job, and highlight important considerations for retirement planning.
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