Big news for 6 crore members of EPFO, 8.50 per cent interest will be available on EPF, may come in accounts by end of December
Shikha Chaurasia
Pune, December 14, 2020: Employees’ Provident Fund Organization (EPFO) can give a big gift to its 60 million members by the end of this month. EPFO can issue 8.50% interest on Employees’ Provident Fund (EPF) for the year 2019-20 at the end of the last month of this year. Earlier in September, the Employees Provident Fund Organization, under the chairmanship of Labour Minister Santosh Gangwar decided to split the 8.5 per cent interest in its trustee meet into two instalments of 8.15 per cent and 0.35 per cent. A highly placed source told the Press Trust of India (PTI) that the Labour Ministry sent a proposal to the Finance Ministry earlier this month to raise the interest rate on the EPF to 8.5 per cent for 2019-20.
The source said, “The Ministry of Finance ratification is likely to happen in a few days. Thus, interest is likely to accrue by this month only.” The source further said that earlier the Finance Ministry had sought some clarification on the interest rate for the previous financial year. In March this year, at the meeting of the Central Board of Trustees (CBT), the highest decision-making body of the EPFO, Labour Minister Santosh Gangwar approved an 8.5 per cent interest rate on the EPF for 2019-20.
While the EPFO at a virtual CBT meeting in September decided to honour its commitment to provide an interest rate of 8.5 per cent for the previous fiscal year, the CBT, in view of the epidemic, raised the interest rate to 8.15 per cent and 0.35 per cent to be divided into two instalments. The Ministry of Labour had then explained that “in view of the extraordinary circumstances arising out of COVID-19, the agenda regarding interest rate was reviewed by the CBT and recommended a similar rate of 8.50 per cent to the Central Government.
This (8.5 per cent interest) will be subject to their redemptions by 8.15 per cent from the loan proceeds and the balance 0.35 per cent (capital gains) from the sale of ETFs (exchange-traded funds) till December 31, 2020.” The source also stated that since the market situation is better than expected, as benchmark indices are at record highs, so it shouldn’t be an issue to credit the entire 8.5 per cent at once.
