EPF interest consideration for Income Tax


Please briefly explain why you feel this question should be reported .


After 13+ years of service, I was laid of (forced resignation) in January 2017 as part of company’s workforce trimming exercise. I did not withdraw my EPF (Employee Provident Fund) corpus then, thinking it’s my savings for retirement. Meanwhile, EPFO has credited interest for FY16-17 and FY17-18 in December 2018 with transaction date as 31-March-2018. For FY18-19 they are yet to process interest). I understand, this interest is taxable, since I am not contributing to EPF for last 2 years. My questions are;

(1) Do I need to pay tax on interest accumulated for FY16/17 and FY17/18 now OR at the time of withdrawal?

(2) If I have to pay tax now, Should I show the EPF interest earned for FY16/17 and FY17/18 in this year’s ITR (as the amount was actually credited for both years in December 2018)? If not, how should I handle this now?

(3) Under what head do I need to disclose this income in ITR-1?

(4) Would the EPFO office deduct 10% TDS at the time of withdrawal when I do it in future? If yes, wouldn’t be it double taxation on me (if I pay tax on it now)?

(5) In case if EPFO account becomes Inoperative after 3 years of non-contributing period, do EPFO continue to pay interest?

I would appreciate your guidance as early as possible. Awaiting your response. Thank You.

Income Tax jayntha 9 months 0 Answers 93 views 0

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