EPF rates of interest for 2020-21: EPFO prone to announce charges on Thursday

There have been speculations that the retirement physique could decrease the rates of interest on provident fund deposits for the fiscal 2020-21 put up the COVID-19 financial downturn all through 2020. Last yr, in March, EPFO had diminished the rate of interest on provident fund deposits to a seven-year low of 8.5% for 2019-20. The board earlier mentioned it could pay 8.5% curiosity to its subscribers for the yr ended 31 March in two installments— 8.15% from debt investments and 0.35% from fairness. “It would comprise 8.15% from debt earnings and the stability 0.35% (positive factors) from the sale of ETFs (exchange-traded funds), topic to their redemption by 31 December 2020″, the retirement fund earlier said. “There is no going back on the 8.5% rate for FY20, but the current situation has pushed us to go for two instalments. Some of the investments could not be encashed due to the bad market situation. Hence, this new formula,” Virjesh Upadhyay, one other board member of the EPFO and basic secretary of the Bharatiya Mazdoor Sangh earlier advised Mint. The rate of interest was 8.65% in 2018-19. The EPFO had offered 8.55% rate of interest to its subscribers for 2017-18. The rate of interest was 8.65% in 2016-17. Net new enrolments with retirement fund physique EPFO grew by 24% to 12.54 lakh in December in comparison with the identical month in 2019, in accordance with the payroll knowledge. The provisional payroll knowledge of EPFO highlights a optimistic pattern for internet subscribers base progress, the ministry of labour and employment mentioned in an announcement. Finance minister Nirmala Sitharaman introduced in Budget 2021 that curiosity on worker contributions to provident fund of over ₹2.5 lakh every year can be taxed, ranging from 1 April. “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 ₹2.5 lakh,” Sitharaman mentioned in her Budget 2021 speech. Subscribe to Mint Newsletters * Enter a sound electronic mail * Thank you for subscribing to our e-newsletter.