Pf interest taxability

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Hello,

I left my job some 4 years back, and the EPF continues to accumulate interest. I understand that the interest earned each year AFTER the service is taxable.

Please could the tax experts kindly tell me:

1) Since the PF account is still not closed and the accumulated money (with earned interest) is still lying in that EPF account, do I need to consider the interest earned as taxable this year, or should it be considered taxable in the future year when I'll withdraw the EPF to my bank account?

2) If yes to above question, where should the interest earned by declared in ITR4 - Income from other sources?

 

Thanks in advance

Replies (2)
 

1) Since the PF account is still not closed and the accumulated money (with earned interest) is still lying in that EPF account, do I need to consider the interest earned as taxable this year, or should it be considered taxable in the future year when I'll withdraw the EPF to my bank account?

It is taxable in the year of its credit... i.e. on accrual basis.

2) If yes to above question, where should the interest earned by declared in ITR4 - Income from other sources?


Correct.

 

 

If somebody stays retired for one year and joins fresh employment from next year and becomes a PF member of a different PF trust but does not get the accumulation transferred to new trust, will he be liable to pay tax on the interest on PF accumulation in the previous trust which he has not withdrawn. Bangalore tribunal went by the fact that the appellant was no more an employee. In my view since his both IDs are registered with EPFO, and the employment has resumed, interest earned from previous and current trust should be non taxable since the resumption of employment, though  with a new employer. EPFO is the governing body and allocates UAN. So long as UAN is active, interest on PF should remain non-taxable

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