Dear members,
Will there be any Income Tax on Interest received for PF during non contributory period. Member is not working for past 3 years.
Kindly contribute your thoughts.
Regards,
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Hey @Ananth ,
During a non-contributory period, when a member is not actively contributing to the PF, any interest earned on the accumulated PF balance is still subject to taxation. The interest earned is treated as income and is taxable under the head “Income from Other Sources” as per the Income Tax Act, 1961.
However, there are certain exemptions available for the interest earned on PF balances, such as:
Employees’ Provident Fund (EPF): The interest earned on EPF is generally exempt from income tax under Section 10 of the Income Tax Act if certain conditions are met. This includes maintaining continuous membership of the EPF scheme for a minimum period and meeting specified conditions related to employment termination.
Public Provident Fund (PPF): The interest earned on PPF is tax-exempt under Section 10 of the Income Tax Act. PPF falls under the EEE (Exempt-Exempt-Exempt) category, which means that contributions, interest earned, and withdrawals from PPF are all tax-free.
It’s important to note that the tax treatment may vary for different types of provident funds and schemes. It is recommended to consult with a tax professional or refer to the latest tax laws specific to your situation to determine the exact tax implications on interest received during a non-contributory period.
Additionally, it’s advisable to maintain proper records and documentation related to PF contributions, withdrawals, and interest earned for tax filing purposes. However, please note that tax laws and regulations can change, so it’s always recommended to consult with a tax professional or refer to the latest tax guidelines for accurate and updated information.
Thanks.
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Thanks a Lot …that helps…
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