The finance ministry of the Union has given its approval, for an interest rate of 8.15% on contributions made towards the fund for the year 2022 23. This decision, which was made following the suggestion of the Central Board of Trustees of the Employees Provident Fund Organization brings news to the 70.2 million individuals who’re subscribers of EPF, in India.
The Union finance ministry has officially declared the interest rate for provident fund contributions for the fiscal year 2022-23, setting it at 8.15%. The approval came via a circular from the Employees’ Provident Fund Organisation (EPFO), conveying the Central Government’s agreement under para 60 (1) of the Employees’ Provident Fund Scheme, 1952, to credit the interest to each member’s EPF account.
The EPFO can now proceed to credit the 8.15% interest rate to its subscribers for the previous fiscal year. This interest rate recommendation of 8.15% for FY23 was made by the Central Board of Trustees (CBT) of the EPFO, which is chaired by Union Labour and Employment Minister Bhupender Yadav and was approved on March 28.
The finance ministry’s approval and notification were awaited after the CBT’s recommendation. Normally, the interest rate is notified in the first quarter of the fiscal year, and subscribers were eagerly anticipating the notification for FY23.
This 8.15% interest rate for EPF contributions in FY23 is marginally higher than the previous year’s rate of 8.1%, which was the lowest in decades. Before FY22, the lowest interest rate on PF deposits was recorded at 8% back in 1977-78.
Many members had hoped for a higher interest rate on their EPF contributions, but the decision depends on the projected income of the EPFO. For FY23, the projected income stands at Rs 90,497.57 crore.
The EPFO serves as the nation’s largest retirement fund manager, catering to 70.2 million contributing members and 0.75 million contributing establishments. However, during FY22, interest credit for subscribers was delayed due to software issues. This was necessitated by the introduction of income tax on EPF savings’ income in 2021-22 on contributions exceeding Rs 2.5 lakh, resulting in the need to separate taxable and non-taxable contributions in subscribers’ passbooks.
