Moving abroad: What to do with your EPF account?

Moving abroad: What to do with your EPF account

• EPF account remains active abroad, but no new deposits allowed.
• Interest accrues for 3 years after leaving India, then stops.
• EPF withdrawal in India is tax-free after 5 years of service.

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You have landed that dream opportunity abroad and are preparing for a fresh start in a new country. While you wrap up formalities and complete paperwork, don’t overlook your Employees’ Provident Fund (EPF) account. Once your employment in India ends, you can no longer continue contributing to EPF.

What happens to your EPF account if you are moving overseas?

If you relocate abroad for work, your EPF account does not automatically close. It remains active until you either withdraw the accumulated balance or transfer it to another eligible account. However, once you stop working in India, both your and your employer’s contributions to the EPF cease.

Does EPF give interest to someone who settled abroad?

According to EPFO guidelines, there is no restriction on the period for membership. “Even after leaving the establishment, a person can continue his membership. However, your EPF account keeps earning interest for three years, post which it becomes inoperative and stops accruing interest anymore. So, instead of making a distinction on geography, i.e. locally or abroad, the time frame of three years decides on the interest payment,” said Amol Joshi, founder, PlanRupee Investment Services.

Transfer to an international social security scheme

India has social security agreements (SSAs) with several countries. If you move to a country that has such an agreement, you may be able to transfer your accumulated EPF balance to the social security system of the host country. This helps avoid double contributions and allows you to count your period of service in India toward pension or social security benefits abroad.

Tax on EPF withdrawal 

When you move abroad as a non-resident Indian (NRI) and decide to withdraw your EPF balance, the tax treatment in India depends mainly on how long you worked before leaving.

If you have completed five years of continuous service in India, your entire EPF withdrawal, including your contribution, employer’s share, and interest, is fully exempt from Indian tax when you withdraw it, even after becoming an NRI. This means no tax is deducted at source (TDS) in India, though you may still need to check whether your country of residence taxes the remittance.

How to withdraw EPF balance?

To withdraw funds, submit an EPF withdrawal form, which can be obtained from the employer or downloaded from the Employees' Provident Fund Organisation (EPFO) portal.

If the Universal Account Number (UAN) is linked with Aadhaar, the Aadhaar-based claim form can be submitted directly to the EPFO office without the need for employer attestation.

Members can also apply online via the UAN portal by selecting “moving abroad” as the reason for withdrawal and uploading the necessary supporting documents.

Kunal Kabra, Founder, Kustodian.life, suggests the following:

If you are already settled abroad, it is advisable to get your EPF withdrawal processed at the earliest. You may be required to make a physical visit or coordinate with your former employer. If handling it on your own is not feasible, consider engaging experts, as time is critical in such cases.

There is a high possibility that the EPFO may not yet be aware that you have relocated overseas. While you may continue to see interest accruing in your account, initiating a withdrawal could trigger scrutiny or possible deductions.

If you are planning to settle abroad and have not contributed to the EPF for over 60 days, it is better to regularise your paperwork, withdraw the funds and close the account before your move.