Advance Tax on EPFO Interest and Calculation

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This discussion clarifies the advance tax implications on Employee Provident Fund (EPF) interest for individuals who have stopped contributing. It addresses whether advance tax is payable on interest earned during a financial year when contributions have ceased and provides guidance on calculating tax for the period of non-employment. Experts suggest using a presumptive interest rate, such as 8.5%, for advance tax calculations when the final rate is not yet declared.

KRISHNA

KRISHNA (Querist)
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09 June 2025 Dear Experts,
I have not been working from August 2024 and I am yet to withdraw my EPF amount. Until July 2024 EPF contribution was done both by me and my employer.

My question is regarding Advance Tax for EPFO Interest for the FY 2025-2026:
- Do I have to pay advance tax (in FY2025-2026) for EPFO interest for FY2024-2025 which is yet to be credited (since it will be credited in November 2025) ?
- Since interest is calculated and paid by EPFO for the complete year FY2024-2025 and I was working until July 2024, I presume I have to pay tax only for the period from August 2024 to March 2025 ?
Any guidelines on how to calculate the tax on interest for the period August 2024 to March 2025 will help.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2025 Use tax calculator available in the net.
Calculate tax and reduce TDS and pay applicable percentage of advance tax for the quarter.

KRISHNA

KRISHNA (Querist)
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10 June 2025 I presume I have to pay tax only for the period from August 2024 to March 2025 ? since I am not employed from August 2024.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2025 Yes, you are right...
....

KRISHNA

KRISHNA (Querist)
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11 June 2025 Thanks for your reply Sir.
Also the concern is .. since the interest rate is not yet finalized for FY2024-2025 and EPF interest amount is yet to be credited, does IT department still say pay Advance Tax on some presumptive interest amount ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 June 2025 Yes, consider 8.5% and pay advance tax.

KRISHNA

KRISHNA (Querist)
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12 June 2025 Thanks a lot Sir.. Best Regards,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 June 2025 You are welcome...
...

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