EPFO department comes under the Ministry of Labor and Employment. It is reported that now EPFO will not make any announcement regarding interest rates on PF without the approval of the Finance Ministry.
Crores of people in the country do private jobs, for them PF (Provident Fund) is a big support. Because the highest interest is available on PF, and there is also the benefit of exemption in Income Tax on investment in it.
But now there is news that PF account holders may get a big shock. The interest on PF may reduce in the coming days. If this happens then more than 6.5 crore people will be affected.
In a report of Indian Express, quoting RTI, this information has been given that the government can take a decision to cut the interest on PF. Because during the financial year 2021-22, EPFO had incurred a loss even after estimating a surplus.
These signs are possible behind reducing interest rates
In fact, during 2021-22, it was estimated that EPFO would have a surplus of Rs 449.34 crore, whereas on the contrary it had a deficit of Rs 197.72 crore. After that, it was decided to reconsider the interest rates being given on PF. However, this news has not been confirmed yet by the government.
The government has taken another decision in this regard. Let us tell you, EPFO department comes under the Ministry of Labor and Employment. It is reported that now EPFO will not make any announcement regarding interest rates on PF without the approval of the Finance Ministry. Actually, till now the system is such that the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organization (EPFO) gives information about the interest rates before the approval of the Finance Ministry. That means people will be able to get information regarding interest on PF only after the green signal from the government.
Now no announcement without approval
According to the rules, now the proposed interest rate on PF will be sent to the Finance Ministry for approval by EPFO. The figures will be made public after the approval of the ministry. Experts are linking this decision to interest rate cut.
Why has the government decided to reconsider the interest rates being given on PF? One logic behind this is that currently the interest received on PF is the highest among all small savings schemes. There is a provision for higher interest only in the Senior Citizen Savings Scheme, which has 8.20 percent annual interest. Whereas the interest rates in all the small schemes including Sukanya Samriddhi Yojana are much lower than PF. For this reason, the Finance Ministry has been advocating for a long time to reduce PF interest to below 8 percent.
At present, the Finance Ministry has fixed the interest on PF at 8.15 percent for the financial year 2022-23. The Finance Ministry believes that keeping in mind the losses incurred by EPF, it is necessary to reconsider the interest rate of PF. There is a need to reduce the high interest rates of PF and bring them at par with market rates.
Although the interest rates on PF have continuously decreased over the years…
– In the financial year 2015-16, the interest rate on PF was 8.80 percent.
– In the financial year 2018-19, the interest rate on PF was 8.55 percent.
– In the financial year 2019-20, the interest rate on PF was 8.50 percent.
– In the financial year 2020-21, the interest rate on PF was 8.50 percent.
– In 2021-22, the interest rate on PF was 8.10 percent.
– In 2022-23, it was increased marginally to 8.15 percent.
How much interest will you get on PF according to the current interest rate? You can extract the figures yourself in very easy ways. If Rs 6 lakh is deposited in the employee’s PF account, then at the rate of 8.15 percent interest, he will get interest of around Rs 50,000. Whereas if you have Rs 7 lakh in your PF account, you will get Rs 58,000 at the rate of 8.15 percent. Whereas if Rs 10 lakh is deposited in the EPFO account, then the government will pay interest of Rs 82,000 on it.
How many EPFO subscribers?
PF is the biggest basis of social security for crores of people working in the private sector. At present the number of EPFO subscribers in the country is more than 6.5 crores.
