EPFO Keeps Interest Rate Unchanged at 8.5 for 2020-21

EPFO Keeps Interest Rate Unchanged at 8.5 for 2020-21
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The interest rate on the provident fund will remain unchanged for the financial year 2020-21, as the Employees’ Provident Fund Organisation has recommended 8.5 percent interest for 2020-21.

This comes as a refutation to the speculations about the lower interest on provident fund due to COVID-19 pandemic induced economic downfall.

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Union Minister of State for Labour and Employment Santosh Kumar Gangwar presided over the 228th meeting of the Central Board of Trustees in Srinagar, where the participants decided to keep the interest rate on provident fund unchanged for 2020-21.

“The Central Board recommended 8.50% annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2020-21. The interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into the subscribers’ accounts,” the board said in a statement.

“People must appreciate that the government has maintained the rate of interest for 2020-21 despite a huge economic downturn due to COVID-19,” Virjesh Upadhyay, EPFO Board Member and General Secretary of Bharatiya Mazdoor Sangh, was reported as saying in a media report.

“In order to rationalise tax exemption for the income earned by high-income employees, it is proposed to restrict tax exemption for the interest income earned on the employees’ contribution to various provident funds to the annual contribution of Rs 2.5 lakh. This restriction shall be applicable only for the contribution made on or after 01.04.2021,” Sitharaman had said in her budget speech.

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