The Labour Ministry will soon notify 8.65% rate of interest on Employees’ Provident Fund (EPF) for 2018-19, said Labour Minister Santosh Gangwar on Friday. Over six crore subscribers will be benefitted.
The notification would enable retirement fund body Employees’ Provident Fund Organisation (EPFO) to settle on withdrawal claims on this rate. Now, the EPFO is paying an interest rate of 8.55% for 2018-19 under PF withdrawal claims. The 8.55% interest rate on PF deposits was fixed for 2017-18.
“The Finance Ministry does not disagree with 8.65% interest on EPF for 2018-19. I believe that it will soon be notified,” Mr. Gangwar told reporters on the sidelines of a conference on private security guards at FICCI in New Delhi.
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In February, the EPFO’s apex decision-making body Central Board of Trustees, headed by the Labour Minister, had decided to raise the interest rate on EPF to 8.65% for 2018-19, which was the first increase in the past three years.
In April, the Department of Financial Services (DFS), a wing of the Finance Ministry, had given its concurrence to the EPFO’s decision to provide 8.65% rate of interest for 2018-19.
The EPFO had earlier reduced the interest rate for 2016-17 to 8.65% as compared with 8.8% for 2015-16.
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After the Finance Ministry’s concurrence, the income tax department and the labour ministry are required to notify the rate of interest for 2018-19. Thereafter, the EPFO would give directions to its over 136 field offices to credit the rate of interest into subscribers’ account and settle their claims accordingly.
According to the EPFO estimates, there would be a surplus of ₹151.67 crore after providing 8.65% rate of interest for 2018-19 on EPF. There would have been a deficit of ₹158 crore on providing 8.7% rate of interest on EPF for the previous financial year. That is why the body decided to provide 8.65 per cent rate of interest for 2018-19.
The EPFO had provided a five-year-low interest rate of 8.55 per cent to its subscribers for 2017-18.