There is good news for Provident Fund account holders. The interest amount is going to be credited in his account just before Diwali. If money is going to come in your account then you can check how the interest will be calculated and how much amount will be credited. You can also get information about the balance as well.
There is good news for the subscribers investing in EPF. A bumper gift is about to come for them in the festive season. The interest amount will be credited to your account just before Diwali. Employees’ Provident Fund Organization (EPFO) is going to deposit 8.1 percent interest soon. The amount will be directly credited to your EPF account. The decision on interest was taken in the last meeting of the Central Board of Trustee of EPFO. After this the Ministry of Finance had also given its green signal. Interest for the financial year 2020-21 will be released for more than 6.5 crore subscribers of EPFO.
Do not get the benefit of interest on the entire money in EPF fund
The contribution of both the employee and the employer goes to the Provident Fund Account. In this, 24% share is deposited by including Basic and Dearness allowance. The government pays interest on EPF every year on deposits in the EPF account. But, do you know how interest is calculated in EPF account? It is generally understood that interest is earned on the entire money deposited in the Provident Fund. but it’s not like that. No interest is calculated on the amount that goes into the pension fund in the EPF account.
How is interest calculated in EPF?
Interest is calculated on the basis of the monthly running balance that is deposited in the EPF account every month. However, it is credited annually. According to the rules of EPFO, if there is any withdrawal from the balance on the last date of the financial year, then 12 months interest is deducted after deducting it. EPFO always takes the opening and closing balance of the account. In this, the monthly running balance is added and multiplied by the rate of interest / 1200.
Withdrawal leads to loss of interest
If any amount is withdrawn during the financial year, then the interest amount is charged from the beginning of the year to the month immediately preceding the withdrawal. The closing balance of the year will be its opening balance + Contribution-Withdrawal (if any) + Interest, the full amount is calculated.
Think of it like this for example
Basic Salary + Dearness Allowance (DA) = Rs.30,000
Employee Contribution EPF = 12% of Rs.30,000 = Rs.3,600
Employer contribution EPS (subject to limit of 1,250) = Rs 1,250
Employer Contribution EPF = (3,600-1,250) = Rs 2,350
Total monthly EPF contribution = 3,600 + 2350 = Rs 5,950
Calculation on EPF Contribution in Every Financial Year
Total EPF contribution in April = ₹ 5,950
Interest on EPF in April = Nil (No interest in first month)
EPF account balance at the end of April = ₹ 5,950
EPF contribution in May = ₹ 5,950
EPF account balance at the end of May = ₹11,900
Monthly interest calculation (EPF Interest calculation) = 8.10%/12 = 0.00675%
Calculation of interest on EPF for May = ₹ 11,900 * 0.007083% = Rs 80.32
By which formula is it calculated?
EPF Interest Calculation: The interest rate for any financial year is notified by the government. Interest is calculated at the end of the current financial year. The interest is calculated by adding the balance amount on the last date of every month of the year by dividing that amount by dividing the fixed interest rate by 1200.
How to check EPF Balance?
- The information about the balance of PF from the UAN number will be received through the message.
- SMS has to be sent by writing EPFOHO to 7738299899 from your registered mobile number.
- After this, you will be given information about the balance in the EPF account through a message from EPFO. It also includes the interest amount.
- PF balance information is available in English, Punjabi, Marathi, Hindi, Kannada, Telugu, Tamil, Malayalam and Bengali languages.
You can also check balance like this
To check PF balance, it is necessary to link UAN with bank account, PAN and Aadhaar. You can check the balance on your passbook on the website of EPFO. You can also check balance by giving missed call on 011-22901406 from your registered mobile number. Balance check can also be done on Umang app with the help of UAN.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
