Tipping Point: How are EPF investments taxed?

No taxation at the time of investment, during the accumulation phase, and at the time of redemption

Employees’ Provident Fund (EPF) in the normal course enjoys EEE (exempt-exempt-exempt) status. It means investments in EPF do not get taxed at the time of investment, during the accumulation phase, and at the time of redemption. Moreover, you enjoy Section 80C deduction on these investments.

    

What happens to interest income from EPF after retirement?  

If you retire but do not withdraw money from your EPF account, interest will keep accruing on the money you have left in this account. However, the tax exempt status will go away two years after the contribution stops. Any interest income earned on this money after retirement will be liable to tax. Tax is applicable even if you have not retired but quit your job. Those who have not yet withdrawn money from their EPF account need to keep this in mind.