Taking a career break? Your EPF balance may stay tax-free, but interest earned after leaving the job could be taxable
India — direction and magnitude withheld
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Key takeaway
ITAT rulings treat interest on EPF balance after leaving a job as taxable 'income from other sources', separate from the Section 10(12) exemption.
- Step 1 · The triggerITAT rulings treat interest accruing on an EPF balance after cessation of employment as taxable income from other sources, separate from the Section 10(12) exemption and the five-year continuous-service rule.
- Step 2 · Knock-onFormer employees holding accumulated EPF balances face a higher effective tax burden on post-employment interest, reducing net retirement savings.
- Step 3 · Reaches youWithheld This step of the chain is withheld. The reason is set out in the notice above — a deliberate omission, not missing data.
The trigger is reported by the source below. The steps that follow are Branch²’s traced reasoning — how the shock could reach a business like yours, not a prediction.
Source: livemint.com
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