EPF interest credited late? Here’s how to avoid tax complications

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Did you too notice that your Employees' Provident Fund (EPF) was credited much later than the financial year end? While this is a normal administrative delay, it can be confusing while submitting your income tax return (ITR). It can even cause a mismatch in tax or notice unless handled properly. Here's a simple-to-follow plan of action on what to do when delayed EPF interest is credited—so you are compliant and worry-free.

Why EPF interest is credited late

Your EPF interest is credited every month but usually credited to your EPF account only at the end of the financial year—pocketed sometimes in July or August. This is because the government declares the interest rate late and the EPFO takes time for internal formalities. Even if your passbook says interest on FY 2024–25, the credit can be seen only in FY 2025–26.

Don't quote the interest for the incorrect year

While the interest is for the preceding financial year, you must report it in the year in which you actually receive credit for it. So, if your FY 2024–25 interest is credited in July 2025, report it in your ITR for FY 2025–26. Reporting it in the wrong year may lead to mismatches with AIS and Form 26AS, attracting scrutiny or a notice.

Give feedback if AIS mismatch occurs

In case you’ve already filed your ITR and later notice that your EPF interest has been credited with TDS deducted, go to the Annual Information Statement (AIS) portal and use the “Submit Feedback” option. Mark the income as “information is correct but relates to a different financial year” so that the discrepancy is flagged. This helps prevent confusion during ITR processing or future assessments.

Track your EPF passbook regularly

Use the EPFO website, UMANG app, or SMS service to verify your passbook. You will find the precise date when the interest was credited. If your passbook does not get updated even a couple of months after the financial year ends, you can file a grievance through the EPFiGMS portal or call the EPFO helpdesk. In the majority of cases, mere follow-up leads to settlement within days.

Avoid pre-withdrawal before credit

If you withdraw your EPF corpus prior to crediting of interest, you could lose interest for the entire year. To avoid this, wait for the passbook to reflect credit. This is especially important if you are resigning or surrendering your EPF account, since partial withdrawals could affect your settlement accounts if interest hasn't yet been posted.

Stay updated, stay compliant

While EPF interest delays are the rule, you need not face tax woes if you declare income truthfully and monitor your passbook. Remember to declare interest within the same year that it is credited, and leverage AIS feedback tools to decode investment mismatches. With some caution, you can avoid penalties and allow your EPF investments to grow unbroken.