EmployeeProvident Fund, or more commonly known as EPF serves as a tax saving tool for salaried employees. The EPF also comes with the presence of a pension in the EPS section of the EPFO that additionally helps in the case of retirement wherein you get monthly pensions due to the service.
EPF usually has a lot of benefits for the individual and can substantially be transferred or withdrawn. Some might argue that transferring is the right way to go in case of a company change, however, withdrawal of the EPF is deemed favorable in some cases also.
If you wish to start your own business or decide to be unemployed for a certain time period, or simply move to a smaller firm, then the EPF is considered inactive. An EPF is only active as long as your company is a member of EPFO, or if you keep working in a company that is a part of EPFO. As soon as you are unemployed, you become inactive and the EPF interests turn taxable. If the same circumstances sustain, then the EPF also stops earning interest.
The money is retained in your account but slowly starts losing value owing to the inflated rates of interest. Hence, the best option is to withdraw your amount if such is the situation.
Also Read- What is EPF? How To Withdraw EPF Online
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