The Employee’s Provident Fund Organisation (EPFO) on Thursday decided to retain 8.5 per cent rate of interest on provident fund deposits for FY2020-21.
The EPFO apex decision-making body Central Board of Trustees decided to fix 8.5 per cent rate of interest for 2020-21 at its meeting in Srinagar on Thursday, reports said.
The disown comes amidst speculations that the EPFO would lower interest on provident fund deposits for this fiscal (2020-21) from 8.5 per cent given in 2019-20 in view of more withdrawals amid the coronavirus pandemic.
In March 2020, the EPFO had reduced interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent in 2018-19.
The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was same as current interest rate.
The EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.
While presenting the Union Budget 2021, Finance Minister Nirmala Sitharaman had announced that PF subscribers who invest more than Rs 2.5 lakh into their PF accounts in a year will not be able to earn mandated 8.5 per cent tax-free return from next month.
Interest earned beyond Rs 2.5 lakh will be taxable as per the budget 2021.
EPFO has more than five crore active subscribers.