Query regarding epf interest for income tax calculation

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Vaish T (Querist)
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28 June 2019 I lost my job 2 years back. I did not withdraw my EPF (Employee Provident Fund) corpus then, thinking it’s my savings for retirement.
Meanwhile, EPF office has credited interest for FY17-18 in December 2018 with transaction date as 31-March-2018.
Since it was way after filing my last year’s ITR, I could not mention it while filing last year’s ITR.
I am well aware that I need to consider interest earned on EPF account during non-contributing period is taxable.

My questions are;
(1) Should I show the EPF interest earned for FY17-18 in this year’s ITR (as the amount was actually credited in December 2018)?

(2) If not, how should I handle this?

(3) As per my observation, typically EPFO credit interest for last financial year in the second quarter (Oct-Dec) of current financial year. So I cannot show it in the current year’s ITR (as due date is 31-July). Can I show it next year’s ITR?

(4) Is Interest earned on both Employee contribution and Employer contribution is taxable OR do I have to consider interest earned only on Employee contribution.

Anticipating your expert guidance. Thank you.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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28 June 2019 If the PF is withdrawn before five years of continuous service, it will be taxable in the hands of the individual—the employer’s contribution along with the interest accrued is taxable as “income from salary". The employee’s own contribution is exempt from tax (to the extent not claimed as a deduction) and the interest accrued on the employee’s contribution will be taxable as “income from other sources".

Vaish T

Vaish T (Querist)
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29 June 2019 Thank you for prompt reply. But sorry, your explanation does not work in my case as I had worked for 15 years continuously before loosing my job. So can you please answer my queries in that perspective? Note that EPF office has credited interest for FY17-18 in December 2018 with transaction date as 31-March-2018. So my questions are;

(1) Should I show the EPF interest earned for FY17-18 in this year’s ITR (as the amount was actually credited in December 2018)?
(2) If not, how should I handle this?
(3) As per my observation, typically EPFO credit interest for last financial year in the second quarter (Oct-Dec) of current financial year. So I cannot show it in the current year’s ITR (as due date is 31-July). Can I show it next year’s ITR?
(4) Is Interest earned on both Employee contribution and Employer contribution is taxable OR do I have to consider interest earned only on Employee contribution.

Thank You.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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19 July 2025 Report FY17-18 EPF interest credited in Dec 2018? No, exempt under Sec 10(12) due to >5 years continuous service
How to handle interest? Exclude from income, retain documents for proof
Can interest be reported next year if not in current ITR? No need; interest exempt
Taxability of interest on Employee and Employer contribution? Both exempt with >5 years continuous service

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