Taxability of Interest on Provident Fund after cessation of Employment

Save Share

This query is : Resolved

Quick Summary

If you leave your job and don't withdraw your Provident Fund (PF) for several years, the interest earned after your employment ceases is generally taxable. Only interest accrued up to your last day of employment is tax-exempt. You may also face a 10% Tax Deducted at Source (TDS) if the interest exceeds £5,000.

Bapun Dasgupta

Bapun Dasgupta (Querist)
Follow

02 September 2025 The assessee has not withdrawn his PF amount after he left his job for quite a number of years. A substantial amount of interest has accrued on the PF amount. Will this interest on PF amount be taxable in the hands of the assessee if he wants to withdraw this interest amount now ?

Shall be thankful if an expert can kindly answer this query quickly.

Thank you and regards.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

02 September 2025 Only the interest accrued up to the date of cessation of employment is exempt; any interest earned after leaving the job becomes taxable at the applicable slab rates in the year it is credited.
TDS at 10% is generally deducted if the interest amount exceeds ₹5,000.

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

20 September 2025 Good Luck..

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now