TDS on interest in PF Contributions

TDS on interest in PF Contributions is tax-free up to a certain limit. However, if the interest earned exceeds this limit, it is subject to tax deduction at source (TDS). The EPFO has issued guidelines regarding the TDS on interest earned on EPF contributions.


The Employees’ Provident Fund Organization (EPFO) is a government organization in India that administers a social security scheme for Indian workers.

It is responsible for managing the Employees’ Provident Fund (EPF), which is a retirement savings scheme for employees in the organized sector.

Employee Provident Fund Organisation (EPFO) issued a circular dated 06th Apr 2022 which clarifies about the calculation and deduction of tax on taxable interest which is relating to contribution in provident fund pursuant to CBDT Notification No. 95 of 2021-Income Tax. Ads by

This circular is applicable to all EPF subscribers with effect from 01.04.2022 for FY 2021-­22.

As per the circular, the effective date for TDS in case of final claim settlement shall be :

  • 01.04.2022 or final settlement/ transfer – whichever is later,

And in all other case,

  • TDS shall be on the date of credit of interest.

The CBDT notification requiring tax deduction at source would be applicable in case of :

  • PF settlement
  • Transfer claims
  • Transfer from exempted establishment to EPFO or vice-versa
  • Transfer between trusts, past accumulation transfer and

Also applicable in death cases in case of the live member;gives you the explanantion methodology of computing TDS, states that taxable part of contribution will be subject to separate accounting of interest and maintenance as closing balance of taxable part will earn interest and subject to TDS.

Accordingly, the interest on contribution and claim for refund shall be divided into two components – Taxable and Non-taxable for the purposes of deduction of tax.

TDS rate shall be :

  • 10% if PF account is linked with valid PAN,
  • 20% if PF account is not linked with valid PAN(i.e TDS rate would be double)
  • 30% under Section 195 subject to provisions of DTAA; in case of non-resident .

Further, it will be applicable to international workers as well.

Calculation of taxable interest relating to contribution in a provident fund or recognised provided fund, exceeding specified limit has been given under Rule 9D in the income tax rules,1962.

The threshold limit shall mean:

  • Five lakh rupees, if the second proviso to clause (11) or clause (12) of section 10 is applicable; and
  • Two lakh and fifty thousand rupees in other cases.”

Don't forget to share this article :-

Stay Updated With Our Blogs!

Explore more of our blogs to have better clarity and understanding
of the latest corporate & business updates.

Why People Choose Our Services ?

Free Legal Advice

We provide free of cost consultation and legal advice to our clients.

Tech Driven Platform

All our services are online no need you to travel from your place to get our services.

Grow your business

Experts Team

We are a team of more than 15+ professionals with 11 years of experience.

Transparent pricing

There are no hidden & extra charges* other than the quote/invoice we provide.

100 % Client Satisfaction

We aim that all our customers are fully satisfied with our services.

On-Time Delivery

We value your time and we promise all our services are delivered on time.

Why Trust legal Suvidha?

People Who loved our services and what they feel.

In this Journey of the past 10+ years, we had gained the trust of many startups, businesses, and professionals in India and stand with a 4.9/5 rating in google reviews.

Rajesh Srivastava
Rajesh Srivastava
Startup CEO
Read More
Great services and expertise. Highly recommended, Quick work and provided good support for the entire process. Made things very easier for us and I got my first ever Trademark for my product in just no time. I recommend their services to all the Startups for a hassle-free registration and other services. Again Thank You So Much Team Legal Suvidha... Good work...
Read More
Excellent service and has been very timely in response. They are very patient too and guided us with the right steps even though we approached them with very few days left before the deadline. I highly recommend them to other startups who need legal advice and do all the paperwork at the year-end. And we would approach them for all our future requirements as well.
Krish Mundarath
Krish Mundarath
Read More
We highly recommend them. Best in class services. Thank you for helping me through the process and for prompt replies. All the Best in your Endeavors. We highly recommend them. Best in class services. Thank you for helping me through the process and for prompt replies. All the Best in your Endeavors. I will surely consider them for future work.
Inamul Hashmi
Inamul Hashmi
Read More
Legal Suvidha filed my GST, Income Tax Returns for my business Happy by their service. They are Excellent, cost effective, efficient, co-operative & Genuine service providers keep up the good work in the future. Thank you for shaping my business in the right direction. I would suggest others to take up their services they are better than other competitions present in the market.

Our Partnerships & Collaborations

Contact us and grow your business

Legal Suvidha App

Now all Professional Services in a Single Click !

Now get all the services required for your business in a single app.

Subscribe to our newsletter & grow your business

Subscribe To Our Newsletter .

Sign up to receive email updates on new product announcements, special promotions, sales & more.