EPF account and tax related query

Great questions about your EPF! Here's a clear breakdown:

1. Interest on EPF after leaving the job (account dormant)

• Yes, you will continue to earn interest on your EPF balance till you turn 58 years old (the age of retirement), even if no further contributions are made.

• However, the interest rate for inactive accounts (no contribution for 36 months) is different. It is currently lower (around 4.5%) compared to the regular interest rate for active accounts (which is around 8.15% - 8.65% as notified annually).

• Your EPF account will be tagged as "Inoperative/Dormant" but it continues to accumulate interest at this lower rate until you withdraw or reach 58 years.

2. Tax implications on interest earned post leaving job

• Interest earned on EPF balance up to 5 years of inactivity is tax-free.

• However, interest earned on EPF after 5 continuous years of inactivity (i.e., no contributions) is taxable as "Income from Other Sources" in the year it is credited.

• Since you left in 2017 and didn't contribute after that, from 2022 onwards (5 years later), interest earned is taxable.

• When you withdraw the entire balance after 58 years, the interest portion credited after 5 years of inactivity would have already been taxed in the respective years.

• The principal amount and interest earned during active employment remain tax-free on withdrawal if you have completed 5 continuous years of service.

Summary: