In one of your post you have mentioned interest earned on epf balance (employee + employer’s contribution) is taxable @9.5% for Recognized PF category.
I have below mentioned queries –
- Currently I’m working with an MNC in IT industry.Will it be considered as Recognized PF category ?
- Is this tax applicable only when full amount is withdrawn from EPF after retirement or every year do I have show it
in my ITR as ‘Income from Other Sources’ & pay tax on that amount ?
- Lets assume for FY2018-19 till March,2019 my epf balance was 10000 and Interest credited by epf is 1000 based on that years epf interest rate.
Now if I calculate 9.5% p.a. interest on epf balance 10000 it will be 950.
But since interest credited by epf is 1000 which greater than 9.5% interest rate then the remaining 50(=1000-950) will be taxable.
So I have to mention that 50 as Income from Other sources while filing ITR for FY2018-19 and pay tax on that 50 rupees as per my tax bracket.
Am I correct ?
- Sometime I have seen EPFO will credit interest not on march month of financial year.Rather they will credit the interest on june-july.
How to show interest income in that case while filing ITR ? Will it be current financial year or next financial year ?
Thanks in advance.
Kindly note that if interest rate offered on RPF/EPF is less than 9.5% then such income is tax-exempt. Anything above this rate is taxable as per individual’s income tax slab rate.
1 – Kindly check with your employer on this. Mostly, it can be RPF (they may have their own PF trust or the funds may be managed by the EPFO).
2, 3 & 4 – EPF full withdrawals before 5 year service period is a taxable income. Also, interest accumulated during the non-contribution phase is a taxable income.
EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?