i am 58 years old and my EPF account has to be closed now. I have not been working since 2018. Since I didnt withdraw my EPF earlier, I have been getting interest on my EPF accumulation since 2018. When I withdraw my EPF i will have to pay Income tax on the interest I earned since 2018. In the past 5 years I had income below taxable.limit so I have been paying zero income tax but I have filed returns for all these years Now when i file my returns for the current financial year, under which section in ITR should i mention this interest.

Ans:  To answer your questions:

1. ITR 2, since you have capital gains from mutual funds.

2. The ITR would have a separate schedule for capital gains in which the details would need to be filled.

3. The EPF withdrawn should be shown as part of exempt income under Section 10(12) of the income tax return in case of recognised provident fund.

4. Your question not clear. If you are asking about the gain on the sale of your equity shares, you need to show it under income chargeable under the head -- capital gains. 

Ans: Person is required to show details of all income correctly in Income Tax Return. Though PPF interest income is exempt, it is advisable to file revised return for AY 2023-24 and show interest income correctly in exempt income schedule.

Ans: Congratulations on your new opportunity abroad. It's great to see you're planning your EPF withdrawal wisely. Let's address your queries in detail.

When Can You Withdraw Your Full EPF?
You can withdraw your EPF under certain conditions:

Retirement: Full EPF withdrawal is allowed at the age of 58.

Unemployment: If you are unemployed for more than two months, you can withdraw your EPF.

Early Withdrawals
Partial Withdrawal: You can partially withdraw for specific reasons like home purchase, marriage, or education.

After 50: Since you are 50, you can withdraw up to 90% of your EPF one year before your retirement.

Upto What Age Can You Earn Interest on Your EPF?
Your EPF account earns interest until you withdraw the amount. However, there are important points to consider:

Active Accounts: As long as you are contributing, your EPF account remains active and earns interest.

Inactive Accounts: If there are no contributions for three years, your account becomes inactive.

Interest on Inactive Accounts
Interest Continuation: Even if your account is inactive, it continues to earn interest until the age of 58.

Post 58: After 58, interest is credited only if you have not withdrawn the EPF balance.

Tax on EPF Interest
Understanding the tax implications on EPF interest is crucial:

Exempted Interest: Interest earned on EPF is tax-free if you complete five continuous years of service.

Pre-Mature Withdrawal: If you withdraw before completing five years, interest is taxable.

Taxation on Withdrawals
After 5 Years: Withdrawals after five years are tax-free.

Before 5 Years: Taxable as per your income slab, and TDS is deducted if the amount exceeds Rs 50,000.

Analytical Insights
Full EPF Withdrawal at Retirement
Withdrawing EPF at 58 ensures you benefit from tax-free interest. Your funds continue to grow, providing a substantial retirement corpus.

Managing Inactive EPF Accounts
It's wise to keep track of your EPF account even if it's inactive. Ensure your KYC details are updated to avoid any complications during withdrawal.

Tax Planning
Consider tax implications before withdrawing your EPF. Plan withdrawals strategically to minimise tax liability.

Benefits of Regular Monitoring
Regularly monitor your EPF account to ensure it's earning interest. Update your bank details and KYC to avoid any issues during withdrawal.

Conclusion
By understanding when to withdraw your EPF, the interest it earns, and the tax implications, you can make informed decisions. Regular monitoring and strategic planning will help you maximise your EPF benefits.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

1. Answer to your first question is YES. Interest earned on non contributory EPF account is taxable.

2. Yes entire interest earned over 3 year period needs to be reported.

3. Your understanding is correct however it is advisable to seek a CA's advice to avoid Income Tax Deptt. queries later on.

Best wishes;