Even after leaving a job, being removed or retired, the tax payable on any employee who received the interest in his EPF account will be taxed. According to the Times of India news, the interest earned on the PF deposited in the employee’s account comes under the purview of tax. This is said by the Bengaluru Bench of Income Tax Appellate Tribunal (ITAT) hearing a case.
News – (November 2017)
It has been said in the decision that if an employee resigns from the job, his EPF account continues, on which he receives an interest until he/she requests to withdraw the money. At the same time, if a person retires at the age of 55, then the account is closed after three years, after which it also ceases to receive interest.
What was the case
A man had retired in 2012 after working in Bangalore software company for 26 years. At the time of retirement, his account was 37.93 lakh rupees. He took that money in 2011, then in 2011, he had increased from 37.93 to 82 lakh rupees. It included an interest of Rs 44 lakhs. The person took out the money without paying taxes. At the hearing, ITAT acknowledged that tax on the interest received after retirement would be taxed.
Source – www.amarujala.com