The momentum for deciding on the PF interest factor for the period March 2021, started from the month of February 2021 when the financial year of the provident fund contributions get closed and a new financial year of EPFO begins from the next month of March 2021.
Since then, speculations were rife that the EPFO may lower interest on provident fund deposits for this fiscal (2020-21), from 8.5 per cent it provided for 2019-20, in view of more withdrawals and lesser contribution by members during this fiscal mainly due to the COVID-19 pandemic.
Last year, in March, EPFO had lowered 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 (employees provident fund) interest rate provided for 2019-20 was the lowest since 2012-13, when it was 8.5 per cent.
The EPFO had provided 8.65 per cent interest rate to its subscribers for 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.
It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13.
During the Budget for FY22, Finance Minister Nirmala Sitharaman said interest on PF deposits will be taxed if the annual contribution is more than Rs 2.5 lakh. “In the Budget 2021, the Finance Minister had sought to tax interest earned on employee contributions in excess of Rs 2.5 lakh. While announcing the amendments to the finance bill on March 23, 2021, the finance minister has increased this threshold of Rs 2.5 lakh to Rs 5 lakh in cases where no contribution is made by the employer to the fund. The private sector employees would not be impacted by this change as the provisions of Provident Fund Act which apply to the private sector, the employer as the employee, both contribute to the fund. This change would benefit government employees where now the threshold of Rs 5 lakh would apply.”
Then again in March 2021, In a major development, it was announced that The Employees’ Provident Fund Organisation (EPFO) is likely to take up the proposal to announce rate of interest for 2020-21 at its Central Board of Trustees (CBT) meeting scheduled on March 4 at Srinagar .
Again in July 2021, The Employees’ Provident Fund Organisation (EPFO) announced that it may credit the interest amount on PF deposits in 2020-21 at the 8.5 percent rate into subscribers’ accounts by July and no particular date was mentioned by which the interest amount would get credited into subscribers’ accounts. However, the agenda failed to take a concrete step in this direction and there was no action on this front although the Labour Ministry had given a green signal to the proposal in this regard.
Last time, many EPF subscribers had to wait for 8 to 10 months to get the interest of 2019-20. Earlier, the Employees Provident Fund Organisation had decided to keep the interest rate unchanged at 8.5 percent, which is the lowest interest rate offered by India’s social security body in the past 7 seven years.
The social security scheme EPF or Employees Provident Fund is administered by the Employees’ Provident Fund Organisation (EPFO) and like every other investment avenue earns interest.
Since the announcement in July 2021 by EPFO of interest rate of 8.5 percent and the same still not getting credited to the eligible EPF account holders’ account, many subscribers started raising queries over the Twitter account of the organization, to which EPFO had responded and said, “The process is in pipeline and may be shown there very shortly. Whenever the interest will be credited, it will be accumulated and paid in full. There would be no loss of interest. Please maintain patience.”
As many as 6 crore subscribers of the scheme , have been waiting since then for EPF interest rate credit.
Notably it is important that you as an EPF subscriber should be acquainted with your UAN or Universal Account Number, i.e. also mentioned in your salary slip, if the case may be. Also for accessing the various EPF related services such as balance enquiry and others, you need to have your UAN in an active state.
Once the interest is credited, PF subscribers can check their EPF balance and the status of the interest in four ways.
Missed call service
Members will get their details available with EPFO by giving a missed call to ‘011-22901406’ from their registered mobile number. The call will disconnect after two rings automatically. This service is free of cost. In order to avail this service, the registered member’s KYC with the EPFO should be complete.
SMS
User should type EPFOHO and send it to 7738299899. The SMS should be in the format-“EPFOHO UAN”. The facility is available in 10 languages. For receiving the message in Hindi, a person will have to type ‘EPFOHO UAN HIN’ and send it to 7738299899.
EPFO portal
After registering yourself on EPFO Members Portal, you can log in to – https://passbook.epfindia.gov.in/MemberPassBook/Login# using your UAN and password. This allows you to view your passbook.
Umang app
EPFO members can view their account balance and EPF statement through ‘Umang’ mobile application. Go to employee centric services and click on view passbook. You can enter your UAN and OTP sent on the registered mobile number to view your balance in Employee Provident Fund.
Nonetheless, the latest news coming in this day of 10th October 2021, is that the The Employees Provident Fund Organisation (EPFO) may soon credit the interest declared for 2020-21 in the accounts of 60 million subscribers, bringing some festive cheer to the salaried class. The interest rate of 8.5%, declared for 2020-21 in March this year, has been awaiting the finance ministry’s approval for over six months now.
Most of the officials have been saying that it will be happening soon and are awaiting financial ministry’s approval in view of the issues about the rate of interest being higher compared with that of other government schemes including public provident fund or small saving schemes.
Currently, the interest rate of some of the government schemes are as follows :
PPF – 7.10 % pa
NSC – 6.8 % pa
Post office monthly – 6.6% pa
Senior Citizens Savings Scheme – 7.4% pa
KVP – 6.9% pa
Sukanya Samruddhi Yojana (SSY) – 7.6% pa
EPF – 8.5% pa
VPF – 8.5% pa
Pradhan Mantri Jan Dhan Yojana – 4% pa
On maintaining the PF interest rate of 8.5%, EPFO retained that it is in a comfortable position to pay out the interest at 8.5% due to its estimation of around 70,300 crore in the previous fiscal including Rs.4,000 crore from sale of its equity investments and Rs.65,000 crore from debt, thus rounding off a surplus of Rs.300 crore compared with the surplus of Rs.1000 crore in the preceding year when the interest pay out was same as 8.5%