The Central Board of Trustees of the Employees Provident Fund Organization (EPFO) on Thursday recommended that subscribers be given an 8.5% interest rate for PF contributions for 2020-2021, keeping the same rate as the previous year.
The EPFO's central board of trustees, who met in Srinagar, ratified the rate after assessing earnings and financial positions.
The decision was taken at the 228th meeting of the Central Board of Trustees, held in Srinagar under the chairmanship of Santosh Kumar Gangwar, Union Minister of State for Labor and Employment.
EPFO's financial advisory panel had already met on Wednesday evening, March 3, and recommended the retirement fund body's board to retain the interest rate at 8.5%.
Although the 8.5% interest disbursement is the same as last fiscal year, it will cheer 60 million (6 crores) subscribers, and anything less than the said rate could have been the lowest in a decade.
Even when the retirement body made the decision to credit the amount, around 4 million EPFO subscribers did not get it in due course because of KYC mismatches.
Earlier, experts were speculating that EPFO may cut interest on EPF for this fiscal (2020-21) on the back of large withdrawals and fewer contributions being made amid the Coronavirus pandemic.
The EPF interest rate stood at 8.65% in FY19. However, EPFO kept the rates at the same level as it was for 2019-20.
The 2019-20's interest payout was in the news for myriad reasons, comprising delay in the sale of equity and interest credit, speculations of disbursing it in two installments, and qualms on whether EPFO can pay 8.5% post the Coronavirus-induced economic slump throughout 2020.
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.