New Delhi, Oct. 5 -- Taking a career break does not necessarily mean your EPF account stops earning interest. But employees who leave a job and keep their EPF balance invested during the gap need to pay attention to the tax treatment of the interest earned during that period.

According to CA Chandni Anandan, tax expert at ClearTax, some Income Tax Appellate Tribunal (ITAT) rulings have held that interest accruing on an EPF balance after cessation of employment can be taxable, even if the employee has already completed five years of service.

The distinction is important because the five-year service rule and the tax treatment of post-employment interest operate differently.

Under Section 10(12) of the Income-tax Act, the accumulated EPF...