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Missed declaring EPF interest for FY 2024-25? Here’s how you can correct it now

balwant jain
By Balwant Jain

4 min read | Updated on August 21, 2026, 11:51 IST

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SUMMARY

Missed reporting taxable EPF interest for FY 2024-25? Know whether you can file an updated ITR, use the receipt basis or correct the omission now.

Missed declaring EPF interest for FY 2024-25

Once the contribution ceases but the interest does not cease immediately and gets credited till 58 years in case the employee retired on 55 years of age or earlier. | Image: Shutterstock.

Retirement does not necessarily mean that your EPF account stops earning interest. For many retirees, the tax treatment becomes relevant only when they later discover that interest credited after they stopped contributing to the EPF may not enjoy the same tax-free treatment. This can leave taxpayers wondering what to do if they have already filed their ITR and received their refund.

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Today's Q&A explains such details in response to a query by a reader.

Question: I retired during the financial year 2024-2025 but did not withdraw my EPF balance. My Income Tax Return (ITR) was filed within the due date for the Assessment Year 2025-26 and was processed and refund was also issued. Now I have come to know that interest on EPF account balance accrued for the period after date of leaving job is not exempt and has to be included in the income. I was ignorant about this. Now I want to correct the omission and pay the taxes on the interest credited during the financial year 2024-2025. Under what section I can file a revised return? Can I file an application under Section 154?
Answer: An employee is not required to withdraw the balance outstanding in his EPF account immediately after his retirement. As per the Employee Provident Fund Scheme, the interest does not cease to be credited immediately after retirement of the employee. Interest on the EPF balance is tax-free under the income tax laws as long as contribution to the scheme continues.

Once the contribution ceases but the interest does not cease immediately and gets credited till 58 years in case the employee retired on 55 years of age or earlier. Even interest gets credited for 36 months after retirement at 58.

In respect of income under the head “Profits and Gains of Business or Profession” or “Income from other sources” the taxpayer has two options to offer the income under these two heads either on accrual basis or on receipt basis. The taxable interest on provident fund account is taxed under the head “Income from Other Sources” so you can either offer it on accrual basis or on receipt basis.

In case you wish to offer the same on accrual basis as the time period for filing the revised Income Tax Return for the financial year 2024-2025 corresponding to assessment year 2025-2026 is over, you cannot file a revised ITR now offer this interest income.

However, the Income Tax Act 1961 which applies for and upto assessment year 2025-2026 provides for filing of an Updated ITR within 48 months from the end of the assessment year. So you can file an Updated ITR disclosing the proportionate interest for financial year 2024-2025 by paying additional tax in addition to the tax and interest due.

If you do not want to pay the additional tax, you can offer the interest for that year in the year in which you withdraw the outstanding balance in provident fund account on receipt basis.

Please note that if you decide to offer it on receipt basis, you may have to pay tax at higher slab rate if your total income including such interest is high.

Have a personal finance, mutual fund, or income tax query? We will try to get them answered by experts. Write to sangeeta.ojha@rksv.in
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Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. The above Q&A is only for informational purposes and should not be considered investment or tax advice from Upstox. Please consult a tax expert for your complex tax problems.

About The Author

balwant jain
Balwant Jain is a Mumbai-based tax and investment expert.

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