Income Tax - Rate of Interest for EPF Notified at 9.5 percent
AS per para 6(b) of Part A of the Fourth Schedule to the Income Tax Act, interest credited on the balance to the credit of the employee (in respect of a recognized Employees Provident Fund) in so far as it is allowed at a rate exceeding such rate as may be fixed by the Central Government in this behalf by notification in the Official Gazette,
shall be deemed to have been received by the employee in that previous year and shall be included in his total income for that previous year, and shall be liable to income-tax.
This means that any interest in excess of the rate prescribed by the government will be taxable. Now the Government has fixed this limit of interest as 9.5% with effect from 1.9.2010.
This rate was earlier fixed at 8.5% with effect from 1.9.2010, by Notification No. 69/2010, DATED 26-08-2010.
Now is it amended retrospectively with effect from 1.9.2010? Maybe CBDT should clarify.
Income Tax Notification No. , Dated: May 13, 2011