The Finance Ministry of the Central Government has increased the interest rate for the EPFO (Employee Provident Fund) year 2023. The Union Finance Ministry has increased the interest rate from the existing 8.1 percent to 8.15 percent.
With this, the employees contributing to EPFO will now be able to get more benefits. The Ministry of Labor and Employment, Government of India, has given the approval of the Central Government under Para 60 (1) of the Employees’ Provident Fund Scheme, 1952, for crediting interest for the year 2022-23 in the account of each member of the EPF scheme.
The Union Labor Minister had recommended that
The Central Board of Trustees of EPFO is headed by the Union Labor and Employment Minister Bhupendra Yadav. Bhupendra Yadav had recommended 8.15% interest rate for the year 2023. He made this recommendation on March 28 for the financial year 2023. Usually, the interest rate is notified by the Finance Ministry in the first quarter of the financial year and the customers were waiting for the FY23 notification. But now after getting the permission from the Finance Ministry, the benefits will be available to the employees soon.
Will benefit from the current interest rate
The 8.15% interest rate for EPF contribution for FY2013 is higher than the lowest level of 8.1% since FY2012. Earlier, the lowest interest rate on EPF deposits was 8% in 1977-78. Employees who have made their contribution to EPF were expecting higher rate of interest on EPFO contribution for a long time. For FY23, EPFO is estimated to earn Rs 90,497.57 crore. EPFO is the largest retirement fund manager in the country with 70.2 million (7.2 crore) contributing members and 0.75 million contributing establishments. Interest credit for FY22 was delayed for subscribers due to software issues as passbooks of subscribers had to be split into taxable and non-taxable contributions. This was due to income tax on EPFO savings income which was implemented on contributions above Rs 2.5 lakh in 2021-22.
The rate of interest has been very high
in the past, the rate of interest that is running at present has been the lowest rate of interest in the last several years. If we look at the interest rates before 2020, it is understandable that the government was giving more benefits to the employees before this. After the arrival of Corona in 2020, it was reduced to 8.1 percent. But if we look at the interest rates before that, it was 8.50% in 2020-21, 2019-20, it has been up to 8.65% in 2018-19. Similarly, from 2013 to 15, it has been up to 8.75%. But after Corona, the government had reduced it considerably.
