What happens to your EPF Account after gaining NRI status?
You have been dreaming about planning for this for a long time. And now the time is here. You are about to relocate to another country and are on your way to obtain that coveted NRI status.
But amidst all the rejoicing, there are a few questions in your mind. And a key one among them is about your savings and investments in India. You had been working in an organization in India and contributing to the Employees’ Provident Fund (EPF) account every month from your salary. You are about to leave this job. So, what happens to your EPF account?
Can NRIs Maintain an EPF Account?
The moment you cease to be an employee in India, you will not be able to make any further contributions to your EPF account. The amount that is sitting in the account consists of the contribution made by you and the employer, along with the interest accrued thereon.
As per the EPF Act, anyone who would like to claim the amount in the EPF account has to be 58 years of age and obtain retirement from his/her job. You can also withdraw the amount if you are unemployed for a period in excess of two months.
However, if you are relocating to a foreign country after quitting your job in India, then you can withdraw the entire amount. If your EPF account receives no contribution for three consecutive years, it would become inoperative. But it will continue to earn interest till the time you are 58 years old.
If you are going abroad for a short duration, then you should retain the account. However, if it’s for a longer duration or permanently, then complete the withdrawal process before you leave.
The company you work for in India might send you abroad on an assignment for a fair duration. Even then, you might need to make contributions to the prevailing social security program there. But that might not make much sense for you as you would be returning to India after a certain point.
India has social security agreements with some countries like Germany, Australia, Canada, etc. If you are on an assignment in any of these countries, then this agreement would ensure that you don’t need to make local social security contributions. The EPF Office (EPFO) would issue a certificate of coverage to this effect. The only catch is that even while you are abroad, your employer should not stop making a contribution to the EPF account on your behalf.
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