EPF interest declaration in March: Why experts want Budget 2026 to propose this rule

Ahead of Union Budget 2026, experts at the Bombay Chambers of Commerce and Industry (BCCI) have made several pre-budget recommendations related to employees provident fund (EPF). One of the interesting suggestions made by them is around the declaration of EPF interest by March every year.

"The PF Interest rate must be declared latest by March so as to compute the exact Interest Income and deposit correct TDS by the due date of depositing March TDS; alternatively, the interest accrued for the FY 2021-22 may be allowed to be considered in the income of FY 2022-23 and so on," BCCI said in its pre-budget memorandum.

Explaining the rationale for this demand, BCCI said that currently it is difficult for the employer/PF Trust to determine the actual PF interest at the year-end as there is a substantial delay in declaration of PF Interest rates and accordingly the interest for a financial year gets credited after the close of the relevant financial year and after the due date of filing the TDS Returns for the last quarter of the financial year.

The delay "may result in unnecessary interest liability u/s. 234C on employees towards shortfall in Advance Tax instalments of initial quarters since it does not seem to be obligatory for the Employer/PF Trustee to deduct/deposit TDS while crediting such PF interest income to the account of the employees," the BCCI said.

The experts further said that if TDS is deducted by the PF Trust u/s 194A, then TDS Funding will have to be made by the Trust from employees PF Account, which will then lead to a reduction of Accumulated PF balance of the employee

In the lead-up to Budget 2026, BCCI has made several other interesting suggestions related to personal taxation that can benefit salaries and other individual taxpayers. We have covered some of those suggestions as listed below:

• Tax-free EPF interest after retirement is in Budget 2026 wish list of experts; here's why
• Tax idea for Budget 2026: How to stop double taxation for salaried employees switching jobs
• Budget 2026: Small taxpayers with capital gains miss out on Section 87A rebate; BCCI urges fix

Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2026 on February 1, 2026.