November 17, 2017

Tax on EPF after resign, retire or terminated

There is a big shocking news for all those who planned to enjoy tax-free EPF interest on their EPF accumulation up to their retirement. However, recently Income-Tax Appellate Tribunal (ITAT) changed some misconception in relation to Tax on EPF after resign, retire or terminated. Let us see these changes.

Before we proceed, there are two confusions for many of us. The first one is that how long one will earn the interest rate on his EPF after resign, retire or terminated. The second one is the tax on EPF after resign, retire or terminated. Let us discuss one by one.

How long your EPF account will earn interest after you resign, retire or terminated?

I already wrote a post on this in detail (Ref-Interest on Inoperative EPF Accounts up to 58 Yrs of age). However, for your understanding, I will share the same once again.

Before jumping into the recent changes, let us first understand what is the meaning of Inoperative EPF Account. I will try to explain the same through below image.

Interest on Inoperative EPF Accounts

You might have now got the clarity that your account will turn to be INACTIVE once you attain the age of 58 years. As per EPFO rules, the retirement age is 55 years. If you do not withdraw the money within 3 years from the attainment of the age of 55 years, then such accounts are called as INACTIVE EPF ACCOUNTS.

Interest on Inoperative EPF Accounts up to 58 years of age

Now as per the clarification from Ministry of Labour, your account will fetch the regular interest up to the age of 58 years. Whether you contribute to it or keep it idle, EPFO will credit to such accounts as long as you turn 58 years of age.

Here is the press report of the same.

Meaning of Inoperative EPF Accounts

This new rule will be applicable from 11th November 2016.

Tax on EPF after resign, retire or terminated

Now, this is where the changes will come into effect after the recent ruling of Income-Tax Appellate Tribunal(ITAT). This gives a shock to many who continuing their EPF even after resign, retire or terminated.

Because earlier it was believed that amount received is a fully exempt tax on EPF after resign, retire or terminated in case of an employee who is in continues service for a period of 5 years or more.  Full exemption is also available for employees who not completed 5 years because of his ill health, discontinuance of employer’s business or any other reason which is not in control of the employee. If the account is transferred to the new employer then the previous service from whom the account is transferred is also considered as a service period.

Now let me discuss the case detail in relation to this change. I will copy the history of the case which is shared by an article published in recent Time of India dated 16th November 2017. After this ruling, tax on EPF after resign, retire or terminated changed drastically.

In the recent case, the man had retired from a prominent Bengaluru-headquartered software company after 26 years of service, on April 1, 2002, and the total amount in his EPF account then was Rs 37.93 lakh.

Nine years later, on April 11, 2011, he withdrew the grown sum of Rs 82 lakh from his EPF account. This amount included the interest of Rs 44.07 lakh that had accrued post his retirement till the date of withdrawal.

The retired employee did not offer this interest amount to tax, as he viewed it would be exempt under Section 10 (12) of the I-T Act. During assessment proceedings for the financial year 2011-12, the I-T officer sought to levy a tax on this amount and the litigation finally reached ITAT’s doors.

Based on a reading of Section 10(12) and also the definition of “accumulated balance”, the ITAT held: “The exemption is limited to the accumulated balance due and payable to an employee up to the date of his retirement or end of his employment.”

ITAT pointed out that the term “accumulated balance due to an employee” is defined as the balance standing to his credit, or such portion of it as may be claimed by the concerned employee under the regulations of the fund “on the day he ceases to be an employee”.

Thus, the ITAT agreed that the interest earned postretirement was taxable in the hands of the retired employee. However, it added that the aggregate interest of Rs 44.07 lakh should be taxable in the hands of the retired employee, in the respective financial years in which the interest income actually arose.

This gives us two conclusions to arrive at and they are as below.

# Once you resign from the job, retire or get terminated, then whatever the interest you earn from that day to till your withdrawal will be taxable income for you. Even if you retire at 55 years of age and hold the money up to 58 years of age thinking you will earn the interest up to the age of 58 years, will have to pay the tax from the whatever interest you earned from 55 yrs of age to 58 years of age.

# Such interest income will be taxed in the year in which it is accrued. For example, if your age is 40 yrs and you resigned today. However, you wished to withdraw it in FY 2020-21. Then whatever the interest you earn from today to till FY 2020-21 will be taxed yearly based on the interest amount you earned yearly.

I will explain the same from below image for your clarification.

Tax on EPF after resign, retire or terminated

I hope it is now cleared to all that how the tax on EPF after resign, retire or terminated. Also, it might be disheartened many who planned to enjoy Tax-Free return till their retirement after quitting the job.

304 Comments

  1. Dear Basavaraj,

    I worked with my employer for 13 years and now i want to withdraw my EPF amount. My doubt is how much % of interest will they add to my total Pf

    Reply
  2. My retirement age is 60 with my employer, how long can I retain my PF account after retirement. When likely can I close my PF account after retirement

    Reply
  3. Hi,

    Thanks for a detailed explanation.

    I have a question. What if an employee works for 10 years or so then takes a break of 3-4 years (works abroad maybe) and then works again in India continuing contribution to EPF.
    So how will the tax on interest be calculated for those intermediate years?

    Regards,
    Sharan

    Reply
    • Dear Sharan,
      If you are using the same EPF account, then all these contributory period is considered as your service period.

      Reply
  4. Hello,

    I served a PSU for 10 years & 3months till Dec 2018. After that I hv not joined any company till date.
    1) For how long would by epf gain interest?
    2) Is the interest taxable ? If yes, since when ?
    3) can I withdraw a part of the epf ?

    Reply
    • Dear SN,
      1) Up to 58 years of age.
      2) Yes, on yearly basis.
      3) Not partly.

      Reply
  5. I worked in a company for 6 years and changed my job. Transferred my epf to new company, but I quit the new company after 3 years. Will my whole pf be taxed as I did not complete 5 years in new company?

    Reply
    • Dear Goutham,
      It is considered as total period of last and current company as you used the same EPF.

      Reply
      • So wen I quit in my 2nd company before 5 years, the entire amount will be tax free

        Reply
        • Dear Goutham,
          Yes, because your EPF account contribution is more than 5 years in total.

          Reply
  6. I am joined epf member from 2011-12 , I service up to2019-20, at this stage I attain the age of 58, pl tell me how much pension I will get.

    Reply
  7. I have resigned from my company and been unemployed for over 2 months. I’ve contributed to EPF for over 5 years continuously. I’d like to know what parts if any would be taxed if I withdraw now.

    Reply
    • Dear Padfoot,
      As your account is 5 years old (contributions), it is tax free.

      Reply
      • Hi Basavaraj,

        If my period of employment with one company is from 1-Apr-2009 to 21-Aug-2011 and with another company is from 8-Sept-2011 to 16-July-2016. Could you please suggest if I am eligible for TDS free PF withdrawal

        Reply
      • Suppose a person has withdrawn his full PF at 60 when he retired from company A and joined a new job at company B at 61 and superannuated at 65 .- he has 4 years of PF in the second stint after superannuating. Is his PF taxable?

        Reply
        • Dear Vijay,
          If he is using the same old EPF, then NO. If new one, then YES.

          Reply
  8. DEAR Basava Raju,
    I have worked in Indian Railways for 28 years. Deputation period to PSU for 5 years. Technical regignation to IR after 33years and absorbed in PSU in june 2013. Retired on super annuation on april 2018.

    My query is
    1) for my continuous service of 4 years 318 days the PSU is neither paying gratuity nor replying to my appeals.
    MY gratuity in IR is less than 6 lakhs.
    2) is this rule of 4 years 240 days for treating as 5 years continuous service is applicable for claiming exemption of tax on EPFO amount received
    OR
    can be claimed under beyond the control of the employee since PF cannot be transfered from SPF to EPF

    Reply
      • Sir,
        Thanks for the reply. Pl clarify on 2 also.

        Reply
          • Thank you Sir.

            Reply
  9. In earlier mail you have responded to Mr. Shah who retired after 41/2 year that he will have to pay tax. But as I understand retirement falls in the purview of “other cause beyond the control of an employee.” and it should be non-taxable

    Reply
    • Dear Smith,
      If the EPF is less than 5 years old and retirement age is also less than 58 years, then it is taxable.

      Reply
      • Thanks for your response. EPF is less than 5 years(41/2 years) where as retirement age is 58 years. (actually I retired at 58 yrs+1 month).

        Reply
  10. Sir,
    I have worked for 2.5 year in a psu from Aug 2015 to Dec 2018and after resignation joined a central govt. Job where nps is applicable. I can’t continue my epf account. So I have withdrawn my epf last year. Will it be taxable???
    Is there any way I can get the exemption???

    Reply
    • Dear Sayan,
      Yes, it is taxable and there is no option than to pay tax.

      Reply
  11. Dear Mr. Basavaraj,
    I resigned from a PSU in the month of May 2018 after working closely 12 years. I have withdrawn the entire PF amount in FY 18-19. Now I have the following queries

    1. Is the total withdrawn PF amount (paid to me in July 2018) considered earning for filing ITR for FY 18-19.
    2. Is TDS applicable on the total PF amount for filing ITR in the assessment year 19-20.

    Reply
  12. Dear Mr. Basavaraj,

    I resigned from my Indian company in Oct. 2018 after 5+ years of service.
    As I am currently abroad and plan to be so for next couple of years.

    I have mainly queries on 2 scenarios.

    1.Treatment of tax on epf interest income after resignation till complete withdrawal (No jobs later).
    a) Is the tax deducted every year from the interest income?
    If so, what is the tax slab (like ‘flat 10 % on FD insturuments’ or ‘progressive rate based on interest income’)?

    Here, is it possible to avoid TDS of interest income (by submitting 15G forms)? Any other procedure?

    b) OR is the tax applied on total interest income (resignation and thereafter years) if the epf amount is withdrawn?

    2. Once I return to India, I become an employee and start contributing to EPF again (say in 2022). In this case, will the epfo continue applying tax on break period interest income(Nov 2018 to 2021)? or will it completely stop?

    Thanks in advance,

    Ganesh

    Reply
    • Dear Ganesh,
      1) a) There is no concept of TDS on yearly basis for such inactive accounts.
      b) Your EPF is more than 5 years older. Hence, it is tax free.
      2) Yes, as per the rule any interest on idle account will be taxable income for that particular year.

      Reply
  13. I have a query:
    For a retired govt employee, who did not withdrew his EPF amount post retirement needs to pay tax on interest for that FY. Can you guide me in which section/category of other income should it be reported?

    Reply
    • Dear Vignesh,
      If there is no EPF contribution, then for that particular year it should be considered as income. You can show it under the head of income from other sources.

      Reply
  14. Dear Basavaraj,
    Thank you for all the efforts in sharing your knowledge in this blog
    My scenario is-
    My age is 30 years and currently working abroad
    I worked in India from 03/2012 – 05/2014(contribution to EPF for around 2 years). Now I want to withdraw the PF amount 06/2019 (After 5 years). Will the PF amount be taxable given the scenario that I am withdrawing after 5 years(but not 5 years of continuous service as employee)?

    Reply
  15. Dear Sir,
    You are doing a great valuable service to the public. Thank you for the same.
    I am 62 years and still working in a private company where retirement age is 65. Both employee share and employer share are being contributed regularly to EPF account. Is the interest earned beyond 58 years till 65 years, the year of retirement taxable? How many more years beyond the retirement at 65 years, the EPF account can be maintained without contribution?

    Reply
    • Dear Kumar,
      As per my knowledge, if your retirement age with your employer is up to 65 years, then you will earn up to 65 years of your age.

      Reply
      • Thank you sir.

        Reply
  16. Hello my name is Govind prasad & my UAN no. is 100768772734 my Settlement amount is 53075 but i had received 47767.
    Please clearify to me this what happened

    Reply
  17. i am 44 years old and i planned to resign from my job from june 2019. can i get eps from july 2019. i am contributing 22 yeras in eps.

    Reply
  18. In my company age of retirement is 60 years. Contributions to EPF continued after 58 years and will go on until I attain age of 60 and retire. Will EPFO not pay interest for last two years ?

    Reply
    • Dear Ravi,
      As per the current rules, you are not eligible to earn the interest after 58 years of age.

      Reply
      • can i withdraw pf attain 58 years of age my retirement is 60 years

        Reply
  19. Dear sir
    My father join his job 2008 and his boss terminate him 2018 it’s complete 10 years, but when he is 58 years that time his job period 6 years and when he terminate his age is 64.but when his boss terminate him he is not feeling well he have paralise attack and his boss terminate him. We withdraw his epf amount but no one guide us he is eligible for pension or not please help me sir

    Reply
    • Dear Sandeep,
      Better you immediately approach the employer or regional EPFO.

      Reply
  20. Hi,
    I have served 4.5 years for a company and resigned. Later I have moved to different country and doing job there. Could you please let me know when I can withdraw epf amount without cutting Tds.

    Thanks a ton in advance.

    Reply
  21. Dear Basavaraj,
    I have quit my org in year Aug 2011 at that time there were no UAN numbers. I have submitted by PF withdrawal form in Nov-18 which the regional PF has received in Dec-18, its been 3 months & the PF is still not processed. The PF office says the account is now inoperative & there is extra interest that was added to the account so that withdrawal cannot be processed
    Is there anything that can be done to resolve this matter.

    Reply
    • Dear Mag,
      It is wrong that one can’t withdraw if the extra interest is added. As per me, you can still withdraw if you are out of job. Raise an issue with EPFO Grievance Cell Online.

      Reply
  22. Please confirm if any futher appeal has been made against the ITAT order to a higher authority.

    Reply
  23. Dear sir
    My service started from April 2014 and contribution to EPF from 05/2014 now i will be retiring on 31st march 2019 at the age 62 . My service is one month less than 5 years .
    My withdrawal of EPF will be taxable if i withdraw only after 5years and 3 months ???

    Reply
  24. Dear Mr Basavaraj,
    I have taken retirement, but continue with my EPF account in the private company that I worked with.
    This EPF trust has invested in ILFS bonds, in which there is risk of running losses due to the toxic bonds.

    https://m.economictimes.com/industry/banking/finance/provident-funds-face-crores-in-losses-from-ilfs/articleshow/67546640.cms

    My question is :

    1 ) Is there a possibility that I would lose money, or is it mandated that these firms have to make good any losses , as per the condition laid out by Employee Provident Fund Organisation, wherever it permitted such funds management.

    2) Are the Private trusts mandated to make good any loss for the retired employees also ( ie, inoperative accounts ) , or is it for the operative accounts ONLY ?

    Reply
    • Dear Sandeep,
      1) They have to deliver as per the EPF rules.
      2) It is for both.

      Reply
      • Can you please elaborate on your comment – “they have do deliver as per the EPF rules”.
        Are you confirming that the companies are mandated to make good the losses, and that I DO NOT STAND TO LOSE MONEY ?

        Kindly do confirm.
        Thank you.

        Reply
  25. I am in a 0% tax bracket for last 3 years and my accumulated PF is earning interest. However, if I withdraw my PF after another 5 years(Say 2024), will I need to pay tax on the full accumulated interest for 5 years based on the bracket I fall in in 2024 or will the interest be taxable as per the slab I was in when the interest was earned ?

    Reply
    • Dear Raju,
      Your withdrawal will be taxable in the year of 2024. Also, as your account is idle, each year’s interest is taxable income for you.

      Reply
      • I have resigned in October 2016 at age 55. EPF interest is credited. Do I need to show as income in current year ITR or can show as taxable income in October 2019 financial year Tax return. My income is below 2.5L.

        Reply
  26. Dear basavaraj

    Thanks for the detailed note. I have a queer situation. I was employed in my last firm for 12 years and hence accumulated a reasonable PF corpus. I recently became a partner at a leading LLP and thereby while I am still employed, there is no contribution to the PF. Does this mean that the interest on the PF when there is no new contribution is taxable ?

    Reply
  27. Dear Mr Basu,
    Q1) I am 59 years old & is continuing employment as well as contribution to PF(both my share & employer share). Will interest accumulated in current year (after 58 yr)on both my & Employer share is taxable ?? Am I supposed to consider as income in this year return.
    Q2) If I chose to get extension in same company. Do you suggest me to continue towards employee & employer contribution or I should take this amount directly in my salary?
    Thanks in advance for your advise.

    Reply
    • Dear Basant,
      If your EPF is active (with contribution), then it is not taxable for current year. Better to continue EPF.

      Reply
  28. Hello Mr. Basu,

    I have a query about EPF taxation. My DOJ for EPF is 23-Aug-2010 and DOL from EPF is 8-May-2015. I resigned – short service. I have withdrawn the EPF in Nov 2018. They have deducted the TDS 10% while withdrawing. From which year onwards I have to do the IT return revision for accommodating the income tax implications?

    Thanks
    atul

    Reply
    • Dear Atul,
      The ruling came into the picture in November 2017. Hence, you have to revise it from FY 2017-18.

      Reply
      • Thanks Mr. Basavaraj,

        I have further queries.

        1. In FY 2017-18 there was no employee or employer contribution. Hence I need to revise my return by only the interest earned in that year (i.e. 2017-18) under ‘Other Income Source’. Is my understanding correct?

        2. Also since there is some interest shown in FY 2018-19 as well, I need to take care of it while filing return of AY-2019-20. Is it correct?

        3. Since there is no contribution to my EPF from 2015 onwards, I need not change 80C numbers in my return (deduction by the employee contribution amount). Am I right here?

        Thanks once again

        Reply
          • Thanks Mr. Basavaraj,

            The EPF departments has not credited the TDS to CBDT. My main question is when can I claim the TDS benefit? I have received the settlement in Nov 2018, hence I feel TDS reflection will happen by March 2019. So shall I go ahead with IT revision of earlier year without waiting for the TDS reflection?

            Reply
            • Dear Atul,
              It is better to wait the same to be reflected in TDS.

              Reply
  29. Dear Mr. Basavaraj Tonagatti,

    1. I worked for a company from feb 2012 to apr mid 2016 (4 years+1.5
    month) then i loss my job. After a gap of 11 months in march 2017 i
    again got a job and currently working. So, now if i withdraw my pf for
    last employer (march 2012 to apr 2016) is it taxable. Please clarify.

    2. If yes then a question i served 4 years +1.5 month then and after gap i
    am in serving 1 year + 9 months now total is 5 years and 9 month
    (before gap 4 years+ 1.5 month and after gap 1 year 9 month). 5 year will calculate last service + current service or what. please suggest.

    Reply
    • Dear Jai,
      1) No, as the service period is less than 5 years.

      Reply
  30. Hi. it has been 10 years since i left my private job. I was asked to resign after which I started my own in freelancing. I worked in my last company for around 2 years. my total experience then was about 10 years. all my EPF has always been transferred from one company to another whenever i shifted. My queries are

    1. Will i get interest till 55/58 years of age?
    2. Will the interest be tax free?
    3. I am planning to withdraw .. will i need my last companies involvement in withdrawing the EPF?
    Please help
    Thanks

    Reply
    • Dear Bhavana,
      1) Yes.
      2) Tax-Free up to last year and from now onward it is taxable.
      3) Not required.

      Reply
  31. Hi thanks for such a detailed write up i understood .one question i resigned after 8 yrs service in 2016. And 2018 feb i closed pf account and money was credited to my bank ac. How to find out how much of the amt credited is interest(taxable) and how much is not ? Please let me know

    Reply
  32. Hi Sir,

    I was told to leave the company stating reason due to organisational changes, this decision was taken. I am short of 4 days to complete my 5 years service. wanted to know if taxcan be avoided here as it was company’s decision and not in my control. Also,there is a contribution in epf account with less amount for that month which i guess is every month in 5year tenure,some amount was deposited in epf account, kindly reply.

    Reply
      • Thanks sir,that would be a great relief for me.On what basis , this would be tax free.Kindly provide ur inputs

        Reply
  33. Dear Mr Basavraj,
    Thank you very much for all the information that you have provided.
    I have a query regarding interest on PF after leaving the organization.
    1 )Are the private organizations, which manage and maintain their own PF trust, ALSO supposed to continue paying interest on PF on inoperative account after the employee has left the services, in the same manner as for the EFPO accounts maintained by the government ?

    2) Are private PF trusts bound by ALL the rules framed by EFPO ?

    Reply
    • Dear Sandy,
      There is no such difference between who manages the EPF. Rules are same for all.

      Reply
    • Thank you for your prompt response.

      I have two follow up questions. I am 52 years old and am planning to quit my job.

      1) If I do not withdraw the PF amount, till what age will I be getting interest on my PF. I am 52 years old .
      2) Since I have worked for more than five years, I am assuming that the PF amount accumulated till the date of my resignation will not be taxable.

      Kindly advise on these two points.
      I work in a private company, which manages it’s own recognized PF trust.
      Thank you

      Reply
  34. Sir
    I resigned from a company after serving for 3 years and 5 months. My previous pf accumulation was not transferred to the last employer. Now i am 58 years and 5 months of age and resigned and presently not employed.
    Pl advice me:
    Whether the Pf accumulations are taxable?
    Regards
    Raviganesan
    [email protected]
    77083 55333

    Reply
  35. Basav,
    I need your urgent advise. I had withdrawn my ppf in Dec17 while I was made to quit in Sep15. The amount given to me was minus 10% citing sec 192. Also when I am supposed to file my IT returns now I am told that this PF refund will be treated as an income and I have an additional tax liability. The total service tenure in 2 organizations is six and half years.

    Reply
    • Dear Abha,
      If you used the same EPF for both of your organizations, then the amount received is tax-free. However, if there are two EPF accounts, then both are taxable.

      Reply
  36. Hello Mr Basu,
    This taxability rule of EPF interest for non-contributory period came in 2017-18. Does this apply retrospectively or it is applicable from the FY 2017-18 only? For example if my non contributory period starts from 2015-2016, then the interest on EPF is taxable from 2017-18 only or from 2015-16 onwards itself?

    Reply
  37. Hi Sir, I am in continuous service for 9 (3 companies and got my EPF transferred on each occasion) years, the company am joining now is yet to be registered with EPF. I want to make part payment against my home loan but as I understand that it requires 10 years of continuous service. What remedy do I have? Can I withdraw the entire amount and make a payment to Bank, will it attract income tax.
    Regards,
    Vikram

    Reply
    • Dear Vikram,
      In my view, better to keep EPF for your retirement. However, if you still want to go ahead to withdraw, then you can do so as it is tax-free income for you now.

      Reply
      • Thank You 🙂

        Reply
  38. Sir
    Is this ruling of ITAT also applicable Government provident funds which are governed by 1925 Act? Is this applicable to 10(11) exemption? Pl clarify

    Reply
    • Dear Ankit,
      It is applicable to EPF. I am not sure about which provident fund you are pointing.

      Reply
  39. Dear Basavaraj ji ,..

    Basis following referenced dates, please advise taxability of interest for following periods:-(DOE 30.11.2015 [age 55 yrs, 6 mths.,27 years membership],
    Date attained age 58 – 31.5.2018 )

    1. Interest from 1.12.2015 to 31.3.2016
    2. Interest for 1.4.2016 to 11.11.2016 (date of notification)
    3. Interest from 11.11.2016-31.5.2018

    Reply
    • Dear Alok,
      If the age of EPF is more than 5 years, then it is tax-free.

      Reply
      • Sir,
        My query was with reference to the ITAT ruling of 2017 referred in your article above, would it not have implications on taxability of interest in 3 parts mentioned in my query?
        Kindly clarify again regarding taxability of each part of interest.
        regards

        Reply
        • Dear Alok,
          Let me know your exact doubt (even after reading above post).

          Reply
          • sir,
            Query 1.
            I exited EPF membership after 27 years service at age 55 yrs, 6 months, on 30.11.2015. After attaining age 58 on 31.5.2018, I have applied for withdrawl of PF balance with interest.
            Interest for which of the following periods is taxable :-
            1. Interest from 1.12.2015 to 31.3.2016
            2. Interest for 1.4.2016 to 11.11.2016 (date of notification)
            3. Interest from 11.11.2016-31.5.2018

            Query 2.
            Though I joined EPF in 1989 and exited on 30.11.2015, however my service period with last employer was only 3 months before exiting EPF contribution, though I completed continuous membership period of 27 years. The online system is not accepting my EPS claim form as last service was 3 months (less than 6 months)….please advise

            Reply
            • Dear Alok,
              1) Yes, it is taxable income for such non-contributory period of EPF.
              2) I think it is due to all your past EPF accounts are not transferred to single EPF or your employer not entered the exit date. Check with an employer for the same.

              Reply
              • Sir,
                2) My EPF accounts have been transferred till end of membership, my last date of exit is also entered, my UAN is showing correct PF contribution till last date of exit, EPF withdrawal form has been filled and is in process…..
                But I am unable to fill up and submit Pension form. – I will need to get pension from EPS
                Pl advise

                Reply
                • Dear Alok,
                  In that case, raise an issue with EPFO Grievance Cell Online.

                  Reply
      • Good Evening Basavaraj Sir!

        I have a query on similar line and wanted your guidance. I worked with TCS since Aug 2010 to Feb 2016 (which is more than 5 years with TATA’s PF Trust). Now on Mar’2016 i joined my next IT company and didn’t transfer the PF amount from TCS Epf account.

        Last year (AY2017:18), when I filed my returns, all was fine based on 26AS. But this year I got a notice from IT team, that there is a mismatch in based on 26AS of (AY2017:18).

        While looking closely, mismatch was due the TCS’s Provident Amount row, which was added on 26 AS of last year. It was the interest amount earned from the PF accumulation at TCS. And they had also deducted tax on it at 10%.

        So my question to you is :

        1) is it right that i was charged tax for interest earned on PF amount, just because i resigned and didn’t transfer to my new company? (Please note : My Age is 31 and at TCS i worked for more than 5 years and I have not withdrawn any amount)

        2) If IT Dept, is right then I will just go ahead and refile the last year return again with addition of the PF sources of income. But if NO , can I claim the refund of TDS on PF interest?

        3)And how to claim that while I am refiling the AY 2017:18 .

        Will appreciate your help, in this sir.

        Regards
        Jeet

        Reply
        • Dear Jeet,
          1) They are wrong.
          2) You no need to do as the income interest taxation came into picture from FY 2017-18.
          3) Approach your last employer to correct the TDs.

          Reply
          • ok sure . thanks sir.

            Reply
  40. One of my friend (age 42) has taken voluntary retirement from british council and she has withdrawn pf amount after 2 years and 9 months of her retirement. She got approx Ra. 9 lakh as interest on pf. Kindly advice if this amount is taxable or not.

    Reply
  41. Sir, after resigning from a public sector bank, i have received my terminal benefits such as FULL EPF AMOUNT, GRATUITY AMOUNT (BELOW 10 LACS) and LEAVE ENCASHMENT (BELOW 3 LACS). My question is whether i have to show these exempted amounts in ITR while filling my Income Tax return. If yes , then under which head of ITR i have to put the above data in ITR. Kindly advice me

    Reply
      • SIR,
        THANKS FOR YOUR REPLY.
        MY QUERY IS WHETHER I HAVE TO SHOW TERMINAL BENEFITS( FULL EPF AMOUNT, GRATUITY AMOUNT (BELOW 10 LACS) AND LEAVE ENCASHMENT (BELOW 3 LACS) ), 1ST IN INCOME FIELDS OF ITR AND THEN PUT SAME DATA IN EXEMPTED INCOME FIELDS OR I HAVE TO PUT DATA IN EXEMPTED INCOME FIELDS ONLY. KINDLY ADVISE ME.

        Reply
          • thank you Sir for your valuable advice …

            Reply
  42. Dear Basavaraj,
    I am an NRI for the last few years and recently quit my Indian Company last Financial year after 16 years of continuous Service. My company and me have been contributing the requisite amounts as per law to the EPF account till resignation.I have not made any voluntary additional contributions to the EPF. I applied for withdrawal of EPF lumpsum with the reason of “Permanent Migration From India”. My company has not charged any TDS on the withdrawn TDS amounting to 18 lakh except on interest for the 3 month period after I left the organisation. I am aware that the interest for the period after leaving the organisation is taxable under “Income from other sources” and hence have no problem with that. I have the following queries:

    1) Is tax applicable on the Employee contribution and its interest for the 16 years of EPF accrual during employment. If yes, how and where do I declare that in the current Assessment Year in ITR 2?
    2) Under the Exempted allowance of Section 10 (12) should I declare the entire withdrawn amount of 18 lakh, OR only the employer contribution, employee interest and employer interest accrued over the last 16 years OR some other combination?
    3) Should I be declaring any other amount in ITR 2 with respect to my EPF withdrawal?

    Reply
    • Dear Raghu,
      1) The tax applicable is for the interest earned for those periods of idle (In your case 3 months).
      2) Under exempted income category, you have to declare EE+ER+interest on both.
      3) NO.

      Reply
      • Thanks and I really appreciate your prompt and wonderful response on this. Just a few followup queries:
        1) Does this mean that I will have to declare the following value in Exempt Income:
        Entire EPF amount withdrawn of Rs 18 lakh (which includes Employer Contribution, Employee Contribution, Employer Interest, Employee interest) “minus” the amount of Taxable EPF interest after leaving the employment of the company (ie 3 months of employer and employee EPF interest) “minus” the TDS deducted on the 3 months taxable interest
        2) Does this mean that the entire value arrived at 1) above is exempt from any tax?
        3) Also in ITR2 Under Schedule S, There is a section 1 subsection 7 called “Allowances exempt under section 10 (Not to be included in 6 above)” . Part (iv) of this subsection refers to “Other allowances”. Under this one can select “Nature of Income” as “Sec 10(12) Recognised Provident Fund Received”. Is this the right place to declare the amount arrived at in point 1) above?
        4) Should I add the amount of Taxable EPF interest after leaving the employment of the company (ie 3 months of employer and employee EPF interest) to the schedule “OS” of ITR2 ie “Income from Other Sources” under Section 1 , subsection b) “Interest, (Excluding taxable at special Rates) Gross” ?

        Reply
          • Thanks and really appreciate your timely response.

            Reply
  43. Dear Sir,
    I resigned from a company after 10 years of service. I closed the EPFO account as I have moved abroad. I am filing IT return now. I have the following questions regarding the same. Request your help please.

    1. The amount I received as closure proceeds – Should I declare as income on my IT return & will that be taxed again ? or Will that be exempted ?

    2. In the passbook I see that I have been charged 30% TDS. [There is a difference between amount approved & amount received.] What is the reason ? Is it because I am an NRI ? Is there a way to get that TDS amount back ?

    Thanks.

    Reply
    • Dear Praveen,
      1) It is tax-free income and you have to show under exempted income list.
      2) You no need to worry about TDS. While filing ITR, you can claim the so.

      Reply
  44. I quit my job in 2016 at the age of 55 after 25 years of continuous service and took a break of 11 months. I took up another job in 2017 and have quit it after 8 months in 2018. The clarifications sought are
    1. will the interest earned for the non employment period in financial year 2016-17 be taxed on withdrawal or in tax returns.
    2. Since my EPF was in the process of being transferred to the current organisation will the continuity be considered and consolidated or the the 8 months PF also be taxed along with consolidated interest.
    3. Is it advisable to withdraw in one go or in small amounts as shall turn 58 in 2019.

    Reply
    • Dear Meera,

      1) Please refer the notification date of such change. As per my view, the interest earned by you during 2016-17 still to be considered as tax-free.
      2) Yes your 8 months period is also considered along with your earlier service (if you are transferring the EPF with the current one).
      3) It is up to you to decide.

      Reply
  45. Dear Basavaraj,

    I tried going through the comments before posting my query here but lost it around 100 comments or so. Pls refer to the post if my query is repetitive.

    I had to quit my job due to health issues of a family member after 4 years of service. I understand that my PF amount is liable for tax. I want to know to what extent it is taxable ; Total PF amount accumulated along with interest? Or PF amount for the current FY only?

    Reply
  46. Hello Sir

    My question is if the private EPF trusts are also governed by the same rules on crediting interest etc. Specifically – I am 40 years old and worked in an IT company which maintains its own trust) for last 15 years. Now I will be quitting.
    a) If I do not withdraw my EPF till 58 years, is the private trust bound to give me interest till that time?
    b) If I do not withdraw my EPF and join in some other company which takes part in EPF after 3 years, will I be taxed for the interest earned during these 3 years

    Regards

    Reply
    • Dear Anshuman,
      1) For your information, EPS will not earn a single rupee of interest. Also, irrespective of the type of EPF (managed by trust or EPFO), EPS is always with EPFO but not with your company trust.
      2) Yes, as per above recent changes.

      Reply
      • Thanks Sir for getting back.
        Regarding first point, I am not concerned about the EPS part. My question is if the PF part maintained by the private trust of my current company is mandated to give me interest till I withdraw it (even after quitting my job)

        Regards

        Reply
  47. Dear Sir, I left my job in 2014 and continue to have my EPF account assuming I will earn interest till age 58. On taxability of interest after last date of employment some questions for your help 1. Is interest on the EPF balance on date of leaving exempt? 2. Hence only interest earned on the interest is taxable? or the total interest earned after last date of employment is taxable? 3. Since the ruling came just now, I can show the interest income in the previous year 2017-18 even for the past years? Please help by clarifying. Thanks and Regards

    Reply
    • Dear Mohan,
      Once you leave the job, then the interest earned on your EPF balance is taxable but not total interest. However, if your employment peirod is less than 5 years, then the whole interest at the time of withdrawal is taxable. Start showing the interest effective from the notification date.

      Reply
  48. I worked in A company with EPF contribution for 4 years and resigned. I joined another company B which also contributed for EPF. But there was a break of 2 months between joining the company from A to B. Now I am leaving this company B after 4 years and going abroad. I have total 8 years service but there is break of 2 months in between. So I believe the five years are not complete with continuity.
    If I withdraw the EPF it would be taxable @10%.
    Is there any way to get the exemption of 2 months break so that I can get tax free withdrawal?

    Reply
    • Dear Karnail,
      Whether you used the same EPF account in both companies? If yes, then there will not be any tax. If NO, then you have to pay the tax.

      Reply
  49. Dear Sir,
    I was working in a company till Jan 31st and i got an oppertunity to work abroad , i submitted the PF withdrawal ater 60 days , now almost 1 month now its not yet credited in my account , its holding by my pf trust ( of the organization) , my query is whether i am eligible for getting the interest of all the last 3 months including the withdrawal submission month ? if i understand correctly i should get the interest till the day of disbursment ? correct ?

    Reply
  50. Hi Sir,

    I have worked for 6 years in a private Company and resigned and joined another company with another PF account.

    I have 2 questions

    1) Can I withdraw the amount from first pf account of previous company?
    2) If I am transferring the amount in second account and then can I withdraw the amount? If yes then would I be taxed as this would be a running account?

    Regards,
    Aman Mishra

    Reply
    • Dear Aman,
      1) Yes.
      2) If you transferred, then you can’t withdraw.

      Reply
  51. ihave a epfo account in NGO from 2006-2013,but i left the job in 2013.yet not i with draw my EPFO account .my question is
    Is my account is blocked or get interest from the EPFO accout

    suggest me what to do

    Reply
  52. Sir,
    I joined one private company on 15th sept 2013 at the age of 60 years. The contract ended om 31st March 2015 i.e when I was 62. My company opened a new PF account ( as I had already closed my previous account after retirement). Both were contributing to this account. I had kept EPF account even after my service ended thinking that to avoid income tax on my EPF, I need to keep the account alive for 5 Years. My question 1. Whether will there be any tax if I with draw now ( will be completing 5 years in sept 2018). Whether I will get interest on my inoperative account till completion of 5 years or 3 years from last EPF contribution month.
    Please reply urgently.
    Somanath

    Reply
    • Dear Somanath,
      It will be taxable income for you as EPFO consider the contributory period to understand the age of EPF. Regarding interest contribution, there is no clarity if we consider your case. Hence, I suggest you to raise an issue with EPFO Grievance Cell Online.

      Reply
  53. Hello Sir, i worked for 12 years in a pvt company and am on a sabbatical for 12 to 18 months starting 1st jan 2018. After sabbatical i will be working again. I have resigned feom the company where i worked 12 years.

    My 4 questions are –
    1. Will i get interest on my pf during my sabbatical ?
    2. Normally which month does this interest get credited ? ( as of april end 2018) the interest waa not credited).
    3. Is that interest taxable and which year should i be paying tax on this interest ?
    4. When i start working again ( around june 2019) can i start accumulating pf in the same pf account, by getting it transferred to my new company ?

    Reply
    • Dear Abhijit,
      1) YES.
      2) Hard to say their updates.
      3) If you are not working then interest will be taxable for that year income. If you are working, then it will not be taxable.
      4) YES.

      Reply
  54. I have worked from 2015 August to 2016 November, then I worked in a different company from May 2017 to July & thereafter from 2017 September to date.

    I have seen my PF Account & observed that Interest was credited for the first company & 2nd Company upto my discontinuance & thereafter no interest was credited to the account.

    I did not transfer my PF Account to new company as I was Unaware of it.

    Will there be any other section of the PF Account I need to see for the interest that has been credited for the first & 2nd Company even after my discontinuation? Kindly advice

    Reply
    • Dear Praneesh,
      It may not be credited due to earlier notification. However, in my view, after this above said recent notification, it will be credited. If not, then raise an issue with EPFO Grievance Cell Online.

      Reply
      • Should I see in the passbook itself for interest credit or is there any other section that I should be observing for interest & in how much time can I expect it to credit according to your estimation

        Reply
        • Dear Praneeth,
          You have to check the passbook itself. If it is not reflecting, then knock EPFO.

          Reply
          • Thank you

            Reply
  55. Hi,
    I resigned my job at the age of 57 years in March 2017 and now 58 years old in March 2018. Can you please provide clarity on my two questions:

    1. Upto what year can I continue my EPF account and will earn interest on accumulated balance
    2. What will be the treatment of interest earned after 58 years of age
    3. Any other advice on EPF if you would like to add

    Reply
    • Dear Gurtejbir,
      1) Up to the age of 58 years.
      2) Refer above reply.
      3) Hard to advice blindly.

      Reply
  56. I am 51 years of age and was in service from April 2010 to 03-10-2017 and propose to withdraw entire balance in my EPF a/c in April 2018. I presume that I will have to pay tax on interest accrued from 04-10-2017 to 31-03-2018 for the financial year 2017-18 and on interest accrued from 01-04-2018 up to the date of withdrawal for the FY 2018-19. Please confirm

    Reply
  57. Hi Sir,
    I am Filled Inoperative Account Form on 20th_Mar18. But Still i Have no Respond from EPFO

    Please Suggest

    Reply
  58. Hi, I have resigned after working for 6 years in a PSU. I am going to study for a year. My PF is held in a trust by PSU. I wish to keep it and transfer it to a new employer after I finish my studies. But they say this is not possible and that there are tax implications to this and are asking me to withdraw. Kindly advise. Is there a way to transfer from trust to EPFO and keep it dormant for a year?

    Reply
    • For some reason trusts avoid transfer to PF. I suffered significant loss of interest as my company’s trust issued a cheque which was encashed by PF office months later. Nobody paid the interest to me in the intervening period. Online offline complaints / requests did not help.
      Anyway it appears Govt. is hellbent on milking PF. Better to keep it with you, as far as possible.

      Reply
  59. HI,

    I have transferred my Trust EPF from my previous employer (5.5 yrs of service) to my current employer.
    The process took me about an year and my previous employer has deducted TDS on Interest earned from my last working day to date of transfer.
    I want to know if im liable to pay such tax and if yes at what rate (any special taxation policy)

    Reply
    • Rasu- Please be in touch with your employer. As per me TDS is not applicable. Because you are transferring rather than withdraw.

      Reply
    • Hi Rasu
      Yes,tax will be applicable on the accumulated interest on PF from the time you have resigned till the time it has taken for the amount to get transferred.This is as per tax rules.Since there is already a TDS of 10% you have to pay the remaining tax as per the FY income tax slab since this is accounted as income from other source.Say for example,you fall under the 30% tax slab then you have to pay the remaining 20% tax while filing the return on this accumulated interest through PF.There is a difference between tax applicable on withdrawal vs transfer vs accumulated interest on PF between the time you leave a firm and the time it takes for the money to get transferred.Unfortunetly there isn’t much information available about this on the internet and one has to get in touch with a tax consultant to get these queries cleared.

      Reply
  60. I had earlier sought your advise as to how long my PF account will attract interest on the balance , as I superannuated at my 57 years of age during march 2017.
    To which you had replied that it will get interest till mar 2018, i.e. when I turn 58.
    I checked with my past employer, who is maintaining my PF in a trust. I was told, i will get interest for 3 years from my retirement i.e. till mar 2020, by which I will turn 60.
    Can you please confirm and advise.
    I don’t want to park my funds where I won’t get ant interest.
    Thanks and regards
    Gurumoorthy

    Reply
  61. Can you also share me details of itat order number etc. In this context
    Thanks and regards
    gurumoorthy

    Reply
      • I couldn’t locate either in epdi or in itat website or Google. Hence i requested.
        Various blogs and authors have quoted that order but without any ref no.
        Anyways, Thanks for both the reply.

        Reply
  62. Dear Basuniveshji,
    Hi. I’m back with one more query. I have not withdrawn my PF (i retired from service at 57 years. Since balance in my PF account will earn Interest till 58 years of age. That is 55 years plus 3 dormant years) i shall be withdrawing it only in next FY.
    My query is do i have to pay income tax on the year on which interest earned by the balance in of account. If so, do i have to pay advance tax by 31 mar 2018? That is FY 17-18.
    Or can I pay it on accrual basis. In next financial year.
    Pl advise.
    Thanks in advance
    Gurumoorthy

    Reply
    • Gurumoorthy-Interest on such inactive accounts will be taxable on the year in which it earns.

      Reply
  63. Hi , There are three columns in the passbooks.

    Employer’s contribution(E) and Employee contribution(EE) and pension contribution(p)

    How much will I get if I withdraw my PF amount now?

    Is it E+ EE+ P? or just E + EE?

    One more thing is…if I apply for ONLY pension withdrawal online? How much will I get .

    Thank you

    Reply
    • Ramesh-You will get full of employer and employee share and interest on that. Regarding EPS, it will be payable part of that based on the Table D.

      Reply
  64. I was in canara bank. taken voluntary retirement in 2001. The accumulated balance is still maintained in the bank and they provide interest in the account every half year. They send statement of account by post. I would like to know the difference between the account maintained at bank and epf department. Further, whether the interest amount is taxable at the time of withdrawal from bank.

    Reply
    • Kannan-There is no such changes in rules. You can refer above post for the same.

      Reply
      • Thank you, sir, for your reply. Now I have an idea to draw the balance in my account and pay tax, by working yearly basis from 2002 till day of withdrawal. I would like to know whether tax is payable at the time of withdrawal or I should have paid tax yearly since 2002, every year as per rules.

        If possible, inform the IT form applicable for filing.

        Reply
  65. Hi,

    I quit my job in March 2015 (after a service of 7 years) and started my own venture. Now If I look at the passbook, it shows the contributions (of mine and Employer’s) and Interest till March 2015 and after that just Interest Entries for last 3 years i.e. March 2015, March 2016 and March 2017. I have following questions:

    1. Based on current rules, would the account keep on earning interest? I heard few months back that non contributing accounts stops earning interest after 3 years.

    2. If I withdraw amount in April 2018,

    a) Would everything be tax free?
    b) If answer to above questions is No, what components would be taxed ? I heard that Interest earned for the periods where there is no contribution are to be considered as Income, please confirm.

    Thanks in advance
    Raj

    Reply
    • Raj-Your all questions were answered in above post. Please re-read the same.

      Reply
      • Pardon my ignorance, but I had read all the post before posting my queries. Could you please either reply to my specific points or at-least refer to exact posts where you feel my queries have already been answered.

        Reply
  66. After being an NRI for more than 9 years, I am planning to join an Indian Company as an employee. (I had withdrawn my accumulated PF from my previous employment in India in 2009 itself when I left India for employment outside and I do not have any .
    1) Can I start a new EPF with the new organization?
    2) If yes, will I be eligible for tax free employer contribution to my PPF Account?
    3) Am I allowed to keep the EPF account till the date of my retirement at 60 Years of Age?
    4) If yes, will the balance in the account and fresh contributions earn interest after I attain the age of 58 Years?
    5) As I will not be completing 5 years of service at the time of my retirement at 60, is the final withdrawal at the time of my retirement taxable?

    Reply
    • Ashok-1) Yes.
      2) PPF is different than EPF. Hence, don’t link that to this product.
      3) and 4) Read above post for the same.
      5) YES.

      Reply
  67. I worked 1 year under 1 company only. I am self employed after that since 2 years. I am going to withdraw the amount in financial year 2018-2019. So, for FI 2017-2018, I just have to pay tax on interest. In FI 2018-2019, I would have to pay tax on total (epf+eps amount – interest of FI 2017-2018). Did I guess correctly?

    Reply
    • Shashank-Tax for FY 2018-19 is again only on interest not on principal contribution.

      Reply
      • I had read, PF withdrawn before 5 years of continuous employment is taxed. I was employed only for 1 year. In FY 2018-19, I would be withdrawing the whole amount.

        Reply
        • Shashank-Then it will be taxed. However, refer above post for recent changes.

          Reply
  68. I worked in an organisation for 6 years and then worked in another organisation for 5.5 years. I transferred the PF from my first company to the second one (It is Statutory PF)

    I left the second company about 4 years back and I have not withdrawn my EPF.

    If I withdraw now, will it be taxable? or Fully exempt?

    Reply
      • Mr Basu,

        Sorry could not make out…

        Are you saying – No It will not be taxable -So I need not pay Tax?

        Or

        No – It is not exempt and so I need to pay tax?

        Reply
        • Srivatsan-It is tax-free as your EPF account is more than 5 years old.

          Reply
          • Is the interest earned in the EPF account during non contributing period also tax free – if the EPF account is operated for more than 5 years?

            Or the Interest is taxable for the 4 years of my non contributing period after 11 years of EPF account contribution?

            Reply
            • Dear Srivatsan,
              Refer above post. I have clearly mentioned that for any such non-contributory period, the interest earned is taxable for you (irrespective of the age of EPF).

              Reply
  69. I was given compulsory retirement after 31 yrs of job. And EPF has been withdrawn. Is the amount exempted or taxable. Kindly suggest

    Reply
  70. Dear Sir,

    I left my last company 3 months back. I want to withdraw the PF amount entirely. But I am told that I cant withdraw as I joined another company by now and they have opened a new PF account and it is showing online under my UAN profile. Now there are two PF accounts under the UAN. But the previous PF is not transferred yet to the new one as the new company is yet to deposit PF money in the account and I haven’t received any transfer SMS from EPFO. Can I withdraw the previous company PF or it has to be transferred?

    Kindly suggest.

    Regards,

    Sandeep Das Gupta

    Reply
  71. Hi Basu,
    I want to fully withdraw my PF/PS balance. My previous employer has informed that form 15G is not applicable to exempted Trusts (My previous employer is an exempted trust). As my total yr of service is less than 5 yrs,is there any way to avoid TDS deduction if I’m withdrawing before 5 years?? & also as no more contribution shall be made after I leave my prev. org. that means I can never attain 5 yrs of service. So regardless of time when I withdraw, TDS will be deducted. Pls find me a way to avoid TDS. I’m not working now & have lot of financial need.

    Reply
      • Is there any way to avoid??
        My prev. employer told me “In case TDS is deducted then we will provide you TDS certificate which you can submit while filing IT returns.”..what this means?? pls clarify

        Reply
        • Khan-Whether TDS deducted or not, the income for YOU is taxable and you have to pay the tax. If you are unable to understand these, then better to contact any tax expert of your area.

          Reply
          • Hi Basavaraj,

            In case some one has worked 4 years and 10 months and moved abroad. If he withdraws the epf after completing 5 years. Will he be taxable provided that there is no contribution in last two months ??
            If a person withdraws it in next financial year it is less taxable as person has no income in india. Or in that case also epf is fully taxables?

            Reply
            • Vish-Once your EPF account completes 5 years, then it will be tax-free.

              Reply
  72. Sir I worked for an Airline for 11 years, and I have just quit, when I checked the passbook it had 3 slots.
    1 My contribution,
    2.Employee contribution,
    3.Pension Contribution.
    I chose to withdraw my whole EPF as I am not working anywhere now.
    Will it get the money from all 3 contributors? and if yes will it be taxable?
    Thank you for your help.

    Reply
      • Thank you so much Sir…:-)

        Reply
  73. Dear Mr Basu ,
    I need your professional answer related to a issue which urgent in nature .
    1. The person is a IW ( Japanese )
    2. he started working in india at the age of 64 ( for Three year )( 2014-15 to 2016-17)
    3. His PF and interest for 3 year of JOB ( around 13 lakh )
    4. Now he is back to his home Land and want to withdarwl his whole PF with Interest

    Kindly let me know whether this whole sum is taxable if not what will be the tax implefication of this lumpsum withdrwal( Please mentioned the Income tax section if Possible )

    Reply
  74. Hi
    I resigned from a company in July 17 after I worked there for 3Yrs. Since then I am working independently on contract as a consultant.My age is 41 I hav UAN no. So if I wish to withdraw the amount what portion can I withdraw and what are the Tax implication? Is there any other way out to save tax on such Withdrawl?
    Mandar

    Reply
    • Mandar-I explained everything in above post. Please read and let me know if you still have doubts.

      Reply
  75. I worked for a company from June 2012 to may 2014. I left my job unceremoniously due some issues with employer hence there is no date of leaving the employer is present. From 2014 to till date I am working for an exempted organization. My all emoluments in respect to epf are lying with my epfo account. If i withdraw my epf now, will it be taxable???My services length with my first employer is less than 2 years but my pf is lying in epfo account for more than 5 years.

    Reply
  76. Sir, I retired from govt job 5 years back . I Did not withdraw my GPF at retirement ( I may mention it was GPF and not epf or cpf where employer contributes matching amount ).
    My question is whether intt on GPF earned after retirement is also taxable or is new provision applicable only for epf / cpf .

    Reply
    • Sir, the retirement age in Govt was 58 years

      Reply
      • Thanks , then should I remain invested in GPF to earn tax free interest?

        Reply
        • Gautam-You can if the applicable rules of GPS are tax-free interest.

          Reply
    • is this not discrimination

      Reply
  77. Hi!

    I joined an organization in July 2012 and retired at the age of 60 in Dec 2016. My PF was deposited for 41/2 year. If I withdraw it now then do I have to pay tax on it? I don’t mind paying tax on interest earned after age of 58 years (if it is payable). Also PF office is asking me to fill in form 15G, where as my income now is much higher and I am still in 30% tax bracket. Then should I submit this form?

    Regards

    Shah

    Reply
    • Shah-Yes, if you withdraw not then it is taxable. However, even if you keep also, the yearly earned interest is also taxable on the same year. If your income limit is more than basic exemption limit, then you no need to submit Form 15G.

      Reply
      • Sorry, I am confused with your answer. If I withdraw now – i.e. post retirement but only after serving for 41/2 years, is it taxable?

        Regards

        Shat

        Reply
        • Shah-If you withdraw after 5 years completion, then it is tax-free.

          Reply
  78. Hi Basavaraj,
    I totally hold over 5 year 10 months experience.
    1st company – 2 y 11m – PF withdrawn.
    2nd company – 2 y 10m – PF not withdrawn

    Just wanted check if I withdraw PF now will I be receiving amount with 10% tax deduction?

    Reply
  79. I left my previous job on 6th March 2017 after completing 24 months of service, due to some financial crisis i withdrawn the amount.
    I got the amount in June 2017.
    Currently am in Tax slab and i need to file tax return for 17-18. Till now i never filed IT return.

    That amount i received in this financial year will be taxable or not as it belongs to previous years ?
    Kindly help me as soon as possible.

    Thanks & Regards

    Reply
  80. Hello Basavraj, I worked for a company in North India for 40 months ( 3 years 4 months) and have a Uan and epf number. I left company eleven months back, now I have a consultant based job with no EPF, to fall under ambit of non taxable of withdrawal shall I wait for another 10-12 months so that I can withdraw EPF and eps completely tax free and can I withdraw complete 100% EPF both contributions and eps. Thanks

    Reply
  81. Hello Basavaraj,
    Currently i am not working, I have 2 PF accounts, service in first PF account is 6 years and service in second/last PF account is 6 months. I want to club my both PF accounts. Since i am not employed now what is the procedure to club both my PF accounts so that total service will get accounted.
    Regards,
    Divakar

    Reply
    • Divakar-You have to request for online transfer (Using unified portal).

      Reply
    • Hello Basavaraj,
      Thanks for quick response. Am i still eligible to apply by online transfer though i am not employed ?? as per online transfer form it says current and previous employer, but i my case there is no current employer. Kindly clarify.
      Regards,
      Divakar

      Reply
      • Divakar-If you have UAN and EPF accounts are KYC complied, then you can use the online portal.

        Reply
        • Hello Basavaraj,
          Couple of questions :
          1. In my member profile PAN showing as not verified, How to get PAN verified now. I am not employed.
          2. without PAN verification am i eligable for online PF transfer ?
          3. what is the other means of PF transfer in my case.
          Appreciate your responses.
          Regards,
          Divakar

          Reply
          • Divakar-Inform to your employer. If employer not ready to verify, then raise an issue with EPFO.

            Reply
  82. Hi Sir,

    I had joined a firm in 2010 Jan and quit in 2012, EPF and EPS was there. I moved to new firm where they gave me UAN number annd I can see my EPF and EPS of the new firm. I didn’t transfer my account from previous to new one.
    I had quit the new firm and has now moved abroad.

    When I checked with my previous employer to link my old EPF and EPS to my UAN he said that linking can happen only to EPS.

    My question is if I withdraw my first company EPF and EPS – will I be taxable ? Any clue how much as some say it if free upto 25,000 and 18% from 25,000-65,000 ?

    Second question – Will I be able to transfer my first company account to second company even though I have quit ?

    Third Question silly question – What do you suggest me to do now as Iam confused 🙂 ?

    Reply
  83. I am about to resign my job and moving to a different country. I have completed 6 years in current organization. If i want to withdraw PF, will that be taxable? I have close to 10L in my PF account. Can you help me understanding how this works please?

    Reply
      • Thank you sir. SO what ever i have in PF account, it will be deposited to my account right? I read in some forums which says it is taxable according to amended rules. Some say it is taxable on interest portion. So got confused.

        Thanks for the clarification.

        Reply
          • But..i think Senthil will not be able to withdraw employer contribution till the age of 58 and interest on employer contribution will be taxable every year till the age of 58.

            Reply
  84. Dear Sir,

    I have resigned from my job of 24 years .I have joined another company as a consultant.(contract) Is it possible to have a epf account there?

    I am 48 years of age . I have a significant amount in my EPF . (50L +) pls advice how to go about incase of no possibility of EPF by employer due contract staff.

    Reply
    • Rajesh-If there is no relation between you and your current company, then you can’t be part of EPF. Also, if there is a relation of employer and employee, but employer not part of EPF, then also you can’t be part of EPF.

      Reply
      • I have an appointment letter for a 1 year contract with all benifits of company . I have asked them to open a epf account which will be part of my ctc.

        I wonder if this is possible.

        If not do you suggest I withdraw the amount or keep it till turn 58 that is 10 years from now.

        Reply
  85. Hello Basavaraj,

    In another post you replied me that I need to have only Form 19 and Form 10-c to withdraw manually. In this connection I have dropped the mail to EPFO and got the feedback. But I am surprised they are asking me to attested FORM 15 G (I understand this is only for Senior Citizen to get Tax exemption) . I have already completed 10 years and now I am not working

    Please see below response from EPFO and let me know your thoughts. I guess they are misguiding

    Employee Feedback

    to me

    Sir/madam

    member is advised to fill withdrawal form manually ( 10c ,19, (15 g if your pf amount is more than 50,000) get it attested by your company and submit to your regional pf office along with necessary documents(pan and aadhar , cancel cheque ).

    Regards:
    HELPDESK

    Reply
    • Dinkar-Form 15G is applicable in case of your amount is more than Rs.50,000, your service period is less than 5 years and if your income is below Rs.2.5 lakh. Please reply to them with this basic knowledge.

      Reply
  86. I retire from services on 30/04/2015 on completing 60yrs retirement age was 58but I got 2 yrs extension and cont. to pf was upto my retirement.I have not withdrawn pf amount till date. My question is upto which date I will get interest and what is the tax liabilty

    Reply
  87. Hi Basavaraj,

    Since employer contribution cannot be withdrawn till the age of 58, taxation should be applicable only on employee contribution. Am I right?

    Reply
      • Basavaraj, i did understand that its on yearly interest accumulation.My question is actually for the interest earned on employer contribution. Since withdrawl of employer contribution is blocked and cannot be withdrawn till the age of 58, one has no way of avoiding tax till the age of 58. This does not sound cool.

        Reply
        • Manish-Yes, this may be not so cool idea but this how the rules are.

          Reply
  88. Nice to read your opinions
    I needed two clarities

    1) Our epf account was at baroda epfo office where one of our unit was located .In dec 17 we sold off this unit and we got registered under our other unit epf number located at Bhuj under the Rajkot epfo office .The UAN no was not changed and the transfer was done on line.

    We have a worry that we may loose interest on our epf for some period i.e the transition from Baroda office transfer to rajkot office receipt .Is this true? .
    While transferring the amount to Rajkot registration ,Baroda division has also shown some interest transfer for the period till the amount was with them.Of course we do not know how they have calculated this .

    I am told that since it is epfo to epfo transfer with same UAN NUMBER ,there would be no loss of interest.We all are anxious as few years back we had to shift our PF from our company based exempted trust where our unit was attached to, was also sold and other units where we were shifted to was not part of the exempted trust.Between the period of final transfer date from the trust ,till the time the cheque was physically acknowledged by baroda pf ,two months elapsed and we all lost the interest for this two month for no fault of our .We want to be sure about this time loss, if any, of interest for the transition period
    Would appreciate your reply on this .

    2)In our organisation retirement is between 60 to 61 years of age .As per epfo for 3 yeras the account can be continued with interest earning .However from the epfo site it is not clear if it is 3 years from 58 years or 3 years from actual retirement/last contribution .For eg i would retire on 30 th Jun 2018 when i would be 60 years and 9 months.Can I retain my PF accumulation till Jun 2021 and earn interest on the same ,or only till sept 2017 ,when I am 61 years old (58+3)
    Thanks and regards
    Ashok

    Reply
    • Ashok-1) It will not affect your interest earning.
      2) You will earn the interest up to 58 years of your age.

      Reply
  89. Nowadays many organisations employ people till 60 years of age, and contribute to EPF till then. According to you the y have to pay income tax for interest from 58 years of age. Suppose a mistake has been made and Epfo office takes 2 years after my retirement to correct the mistake. I have not withdrawn the money and closed the epf account since I wanted the mistake to be corrected. Will I have to pay income tax on the interest received while I was waiting for the mistake to be corrected?
    If income tax has to be paid on interest on epf during a break of service or after retirement , why is this information not conveyed to employees by the EPFO? I feel if somebody appeals in the court agains the the ITAT interpretation of taxing interest, they will succeed. There are many instances where courts have overruled ITAT interpretations. There will be thousands of cases where people have left money in epf account after retirement or break of service , thinking interest is tax free , and also in most cases income tax department has not found it out. Hence everybody assumes interest on epf is not taxable.

    Reply
  90. Hi, my(30years,male) scenario is that I resigned from a job after working for 2 years and did not operate my previous epf for next three years. But during this period I was working with new employer and new uan and epf. Now after 3 years I want to merge my both accounts. My question is will I be required to pay any tax on previous epf after the transfer request? Secondly, after transfer will the merged epf be considered 5 years old today.

    Reply
    • Richa-You are TRANSFERING but not WITHDRAWING. Hence, there is no tax liability to pay by you.

      Reply
      • Even if he is not withdrawing, he has to pay income tax on the interest during the period he was not working. The income tax is charged year wise and not at the time of withdrawal. Your interpretation is wrong.

        Reply
          • Yes infact it shows up in 26 AS.

            Reply
  91. Hi

    I have one query. I have been contributing to EPF trough my employer for last 5 years till December 2016. But since December 2016 my new employer has no EPF contribution since we are less than 20 employees in our firm.

    Will the interest earned since Sept 2016 in my EPF accounts be taxable?

    Reply
    • Vijay-I think your employer giving you wrong information. Once your employer comes under EPFO rules (due to more than 20 number of employees), then at later stage irrespective of number of employees (even if there is a fall in employees strength of below 20), still they have to continue the EPF for existing employees.
      Regarding interest on EPF, refer above post.

      Reply
      • Hi Basavaraj

        Thanks for your reply. I was not clear in my query. I changed jobs in Dec 2016 and the new employer had less than 20 employees since they started.

        Hence in this scenario what happens to my EPF balance

        Reply
        • Vijay-Refer above post for interest accumulation and the taxation on such idle accounts where there is no contribution.

          Reply
  92. Hello sir,

    I have changed company last year, my new company provided new UAN instead of connecting to old UAN.
    Transfer of funds to new UAN from my old account is not happening even though I have raised request through EPF portal. Can you please let me know how to proceed here? what is the best way to avoid taxation on my old EPF corpus?

    Reply
    • Rajasekhar-You have to request EPFO through your current employer for the merger of both UAN. Once it is happened, then transfer old EPF to new EPF.

      Reply
  93. Hi… I have worked for 1 year ,3 months.. , resigned 1 year back and moved abroad. So, what is the case if I am not withdrawing my PF balance?

    Reply
    • Swetha-You will earn the regular interest up to 58 years of your age. However, such interest earned is taxable income for you.

      Reply
      • Thank you…

        Reply
  94. Kindly refer to Subhash Bansal vs ITO (2008) 170 Taxman 601 (P & H) High Court case. I think ITAT is not above a HighCourt of the country. Pl make your comments on this

    Reply
    • Samuel-They have not altered the law. But the clarified the definition.

      Reply
      • Law can be altered by parliament only, and interpretation of the law is done by judiciary when there is some doubt in it

        Reply
        • Samuel-That is OK. But here they just identified the RIGHT interpretation.

          Reply
          • The affected person should appeal in high court against this ruling because you people will keep justifying the opinion of ITAT for your interest.

            Reply
            • The law of the land is what has been passed by the parliament and interpretated by HC . This particular interpretation is applicable to one case only , that too because he had gone to a wrong forum.

              Reply
              • Samuel-How can the interpretation of law differ to each individual?

                Reply
              • I am not a legally qualified person, but my simple question is when an HC has given a verdit in this matter how the ITAT can interpret it it differently . Is is ITAT above an HC of the country ?. Else, this ruling is in stainable . You people should advise the plaintiff to appeal against it and advise people to wait instead of creating chaos in the minds of retired senior citizens.

                Reply
                • Samuel-I am just sharing what ITAT ruled which is supreme body when it comes to taxation issue. Rest legality left with individuals.

                  Reply
  95. Hi Basu,

    Suppose there is a gap of 2 years in my employment wherein i have not worked and during these two years i have not withdrawn the EPF, will the interest earned in these two years be taxable? If yes, how will this be computed and what is the provision for me to pay this tax?

    Thanks
    Robin

    Reply
    • Robin-Answer is YES. You have to check the interest accumulated during those years and have to file IT return accordingly.

      Reply
      • Basu,

        on what head this accumulated interest has to be added while filing returns.. is it “Income through other source.?”

        Reply
  96. Hi Basu,

    I read the below statement from my organisation portal. Could you please clarify my queries?

    “Your Provident Fund accumulations with TCS EPF Trust will stop earning interest after 36 months from your date of separation as per para 69 & 72 of Employees’ Provident Fund & Miscellaneous Provisions Act, 1952.”

    How it is possible for my organisation to make my EPF account inoperative after 36 months? As per your article it should be in operative till 58 years old isn’t it?

    Can I reclaim the tax on EPF interest based on income tax slab?

    Thanks in advance.

    Reply
  97. Such strict restrictions to force people to continue EFP accounts after quitting job yet interest earned is taxable if not working. Such a big let down by Income-Tax Appellate Tribunal. While the parliament members eat discounted biryani in parliament canteen at the tax payers expense, the ordinary tax payer suffers by paying tax even on his retirement funds. SHAME! SHAME! SHAME!

    Reply
      • Can we reclaim the interest amount ?

        Reply
          • Hi I worked in a company for 4 and half year and process got shutdown.didTDS will deduct for me if I claim pf as I cant update my pan card in epfo due to mismatch in name

            Reply
  98. This is kind of shocking clarification for EEE that EPF is!

    Now when is this new rule applicable from? If someone has resigned 5 years back and has not yet withdrawn his EPF balance so should he visit all the previous 5 years tax submissions or is it applicable from this year?

    How does one go back 5 years and re-file the returns for each year again?

    Reply
      • Sorry, you meant all the relevant past years?
        Can you also mention how would one go about revising all their 4,5,6 years of tax returns to accommodate this new thing?

        Reply
          • Could not understand clearly about when its applicable as it seems its applicable all along and not a new rule.

            Can you help with this example?
            If someone has resigned in 2012 (say) then does he need to revise all his past 5 years tax returns to accommodate for this new clarification?

            How does one go about revising past 5 years of tax returns?

            Reply
            • Droid-There is no such clarity on this front. However, we must assume that it will be applicable effective from the date of the order.

              Reply

Submit a Comment

Your email address will not be published. Required fields are marked *

Share This