Zee Media Bureau
New Delhi: How would you react if you do not get any interest on your Employees Provident Fund account in 2015-16, and rather get a bonus on the same?
As per The Economic Times report, the Employees' Provident Fund Organisation is considering giving bonus to its subscribers for 2015-16 instead of raising the interest rate.
The first of its kind move may cost a Rs 750 crore to the body, but could offer double-digit returns to crores of workers on their retirement funds.
Earlier, EPFO had proposed hiking the interest rate to 8.95% in FY16, but did not find favour with the Finance Ministry. The interest rate on the EPF in FY 14 and FY 15 was 8.75% .
The report said that EPFO is considering the option of bonus for the first time because this would substantially benefit people in the low income bracket who are otherwise not entitled for an income tax exemption for deductions under PF.
The report said that, those who have not contributed for 12 months in a row would not be eligible for the bonus.
The final decision on the matter is expected to be taken on Febryuary 16. EPFO's Central Board of Trustees, which includes representatives of the government, employees and employers - would weigh both options (bonus payout and an increase in interest rate) and will make a final decision.
To become effective, it will then have to be notified by the finance ministry.