New Delhi: The central board of trustees of the EPFO on Thursday (March 5) decided to lower interest rate on the employee provident fund to 8.50 per cent for 2019-20 from 8.65 per cent in 2018-19.
According to Labour Minister Santosh Gangwar, "The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the CBT meeting today." Gangwar made this statement after the meeting of the central board of trustees of EPFO.
The minister also said that the EPFO will have a surplus of over Rs 700 crore on providing 8.5 per cent rate of interest on EPF for this fiscal.
EPFO has lowered interest rate on the employee provident fund to 8.50 per cent for 2019-20 from 8.65 per cent in 2018-19.
After this interest rate cut, salaried employees will get 15 basis points (bps) lower returns on their provident fund deposits this fiscal.
The EPF interest rate announced for the current fiscal is 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.
The Labour Ministry will now require the Finance Ministry`s approval on the matter. The Finance Ministry has to vet the proposal for provident fund interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal.
(With Agency Inputs)