Interest accrued in PF account after cessation of employment is taxable1 min read . Updated: 08 Sep 2019, 09:55 PM IST
- A recent ruling of ITAT has held that interest earned post cessation of employment shall be considered as taxable in the hands of the individual
- The balance to your credit on the date of cessation of your employment, is exempt from tax if you have rendered continuous service for a period of 5 years or more
I resigned from my job after serving for more than 20 years. I haven’t withdrawn my Provident Fund (PF) even though I am without a job for more than three months as the company’s PF trust pays an attractive interest rate over and above the statutory limit. I understand that they will allow me to keep the money in the PF account for three years. I also understand that the interest earned post resignation is taxable. Do I need to show the interest earned in that particular assessment year in the returns and pay tax on the same or do I have to pay interest for the accumulated interest post separation only after I withdraw?
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