The Employees’ Provident Fund Organisation (EPFO) has announced the interest rates on Provident Fund deposits for the financial year 2020-21 on March 4. The EPFO board has recommended 8.5% interest for the financial year 2020-21, the same as 2019-20.
Key Points
- This decision was taken at the 228th meeting of the Central Board of Trustees.
- The meeting was held in Srinagar under the chairmanship of Union Minister of State for Labour and Employment, Santosh Kumar Gangwar.
- During the meeting, the Central Board recommended an annual rate of interest of 8.50% 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.
- In March 2020, EPFO had reduced the interest rate on provident fund deposits to a seven-year low of 8.5 percent for 2019-20.
- The interest rate for the financial year 2018-19 was fixed at 8.65 percent.
- For 2017-18, the interest rate was 8.55 percent interest rate and for 2016-17 was 8.65 percent.
In Budget 2021, Finance Minister Nirmala Sitharaman had announced that the depositors investing more than Rs 2.5 lakh in EPF in a year would have the interest liable for tax from April 1. In order to rationalize 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 April 1.
