Government approves 8.75% interest rate on Provident Fund Deposits for 2014-15

Government approves 8.75% interest rate on Provident Fund Deposits for 2014-15

NEW DELHI: Over five crore subscribers of the EPFO will get 8.75 per cent interest this fiscal on their provident fund deposits - the same rate as the previous year.

"Finance ministry has ratified the decision of the EPFO's central board of trustees (CBT) to retain 8.75 per cent rate of interest for the current fiscal," said a source.

The rate was same in the previous year, 2013-14, when it was raised from 8.5 per cent in the 2012-13 fiscal.

This rate of interest on PF deposits would now need to be notified by the labour ministry as well as by the income tax department. The decision would be implemented from the date of notification, a senior official said.

The CBT had decided to retain the interest rate on PF deposits at 8.75 per cent for the current fiscal at its meeting on August 26.

As per the practice, decision of the trustees of Employees' Provident Fund Organisation on interest rate is implemented after the concurrence of the finance ministry.

According to the EPFO's income projection, payment of 8.8 per cent rate of interest would have left a surplus of Rs 77.15 crore. But since the income projection of Rs 29,136.42 crore for the current fiscal was done without factoring in interest payment burden due to enhanced wage ceiling, EPFO had suggested to fix 8.7 per cent rate of return on PF deposits for 2014-15.

The body recently enhanced the wage ceiling for becoming member of the scheme at the time of joining a job to Rs 15,000 from Rs 6,500 per month. The new wage ceiling is effective from September 1.

Source : http://timesofindia.indiatimes.com/