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Monday, October 25, 2021

Relief to 6 crore subscribers; EPFO does not reduce return on PF, recommends 8.5% interest for FY21

PF Interest Rate: There is news of relief for 60 million EPFO ​​subscribers. According to the news agency, EPFO ​​has recommended 8.50 per cent interest rate on PF funds for the financial year 2020-21. This is the same as the previous financial year. It was believed that the government may reduce the interest rate on PF funds for the financial year 2020-21. If it were, it would have been the lowest interest rate in the last 10 years. Today i.e. on 4 March, there was a meeting of the Central Board of Trustees (CBT) on this matter, in which this recommendation has been made after discussing the earnings and financial condition of the EPFO.

Let us know that due to the fall in the interest rate in the last few years, there has also been a big impact on the earnings from PF. EPFO invests most of its shares in government securities. This time it is also believed that due to the huge withdrawal and contribution due to Corona virus, the interest rate may decrease. Earlier on Wednesday, the Financial Advisory Committee and Retirement Fund body of EPFO ​​has met.

PF interest rate at lower level

Explain that the interest rates for the financial year 2019-20 was 8.5 percent. The interest rate on PF for 2019-20 is the lowest level since 2012-13. In the financial year 2018-19, EPFO ​​paid 8.65 per cent interest to subscribers.

How to change rates in 7 years

FY 2019-20: 8.5 percent
FY 2018-19: 8.65%
FY 2017-18: 8.55%
FY 2016-17: 8.65 percent
FY 2015-16: 8.8 percent
FY 2013-14: 8.75 percent

The Employees Provident Fund Organization announces the interest rate on the PF Fund for every financial year. Announcing the interest rates for the financial year 2019-20, the board said that it will pay 8.5 per cent interest in two installments in the financial year ended 31 March. In the first installment, 8.15 percent interest will be paid from debt investment and in the second installment 0.35 percent interest will be paid from equity.

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There was a setback in the budget as well

Subscribers had also received a setback in Budget 2021 regarding provident fund. In the budget, the rule was changed regarding tax exemption on contribution to PF. In the new rule, the exemption of interest on PF to people with high income bracket has been reduced. If a person’s annual contribution to PF is more than 2.5 lakh rupees, then he will have to pay tax on whatever interest he gets on the amount of more than 2.5 lakh rupees.

Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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