EPF interest rate 2019-20: Who will benefit, what is the due process, what will happen to those seeking final settlement?—All your queries answered
These are the questions that would be popping up in the minds of crores of subscribers of Employees' Provident Fund Organisation (EPFO).
As Labour Ministry has reportedly, decided to notify 8.5% rate of interest on employees' provident fund (EPF) accounts of over 6 crore subscribers for 2019-20, what does it mean for EPF account holders and how this amount will be credited and what process will be followed? These are the questions that would be popping up in the minds of crores of subscribers of Employees' Provident Fund Organisation (EPFO).
But before we understand this, let us try to find out where this report finds its origin. As per a senior official in the know of the matter, the Labour Ministry has decided to notify 8.5% rate of interest on employees' provident fund (EPF) accounts for 2019-20 after receiving the finance ministry's concurrence. The official was quoted by PTI in one of its reports. "The labour ministry has decided to notify the 8.5% rate of interest for crediting the same into the account of over six crore subscribers of the Employees' Provident Fund Organisation (EPFO)," the official had told PTI.
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The rate of interest on the EPF has been formally approved for notification by Labour Minister Santosh Gangwar on Thursday after receiving the finance ministry's concurrence, the official said.
Let us understand what will happen next. Well, next the interest rate would be first officially notified in the government gazette following which retirement fund body, EPFO, would give directions for crediting the rate of return on EPF into the subscribers accounts.
Those who are seeking a final settlement and the interest for the current year is not notified, interest is credited on the basis of the rate declared for the immediately preceding year. The EPFO had provided 8.65% of interest on EPF for 2018-19 to its around six crore subscribers.
The move will benefit over over six crore subscribers of EPFO. Both employees and employers together contribute 24% of the basic salary plus dearness allowance on a monthly basis towards the employee’s provident fund (EPF) run by the Employees' Provident Fund Organisation (EPFO). Of the employer's 12% contribution, 8.33% goes towards pension corpus.
EPFO's apex decision making body Central Board of Trustees in March this year had approved 8.5% interest rate on EPF for 2019-20. In September, EPFO had decided to split 8.5% interest into two installments of 8.15% and 0.35% but later the labour ministry decided to credit the entire 8.5% into subscribers' accounts in one go.
(With PTI Inputs)
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