EPFO Drastically Cuts the Interest Rate on EPF Deposits
A moment of dismay for millions of salaried employees has incurred after the Labour Minister, Santosh Gangwar  announced the lower Interest Rate on EPF Deposits to 8.5% for the financial year 2020.
The Employees’ Provident Fund Organization conducted a Central Board of Trustees Meeting on 5th March 2020 wherein they decided to slash the interest rate on PF deposits from 8.65% (2018-19) to 8.5% (2019-20). The decision will affect the earnings of over 6 crores EPFO subscribers. The new rate of interest is 15bps lower than the rate of the previous financial year.
After the meeting, Santosh Gangwar, Labour Minister, shared his view on the matter by saying “EPFO has decided to provide 8.5% interest rate on EPF deposits for 2019-20.” He further said that “EPFO will gain a surplus of over INR700 crores this fiscal due to the taken step.” As per the reports, EPFO has taken the decision to sustain the organization.
|Financial Year||Rate of Interests to EPFO Subscribers|
The table given above depicts that the latest interest rate is the lowest as compared to the previous financial years.
The Employees’ Provident Fund abbreviated as EPF holds predominant importance in the lives of salaried individuals. It acts as a potent investment scheme for the employees of India. All the entities that employ 20 or more people facilitate the benefits of PF account. The Employees’ Provident Fund Organization (EPFO) is a statutory body that has introduced EPF under the Regulations of the Ministry of Labour and Employment.
The EPF scheme aims to protect the employees post-retirement by promoting thrift and savings of funds. It is collective contribution of funds by both the employer and employee every month. Those contributions then earn a fixed amount of interest set by EPFO at regular intervals. Moreover, the final amount of interest received on the deposit is exempted from any kind of tax. Thus, an employee can withdraw the entire amount of funds without paying the tax imposed on it.
The latest decline in the interest rate of EPF may seem to be distressing for the employees’, but the situation may improve in the upcoming years. for EPF Registration or advisory, Visit our official website.