The Finance Ministry on Wednesday said that there is no loss of interest rate for subscribers of Employees’ Provident Fund Organisation (EPFO) and the delay in crediting the same for FY22 is due to software upgrade being done to account for change in the tax incidence.
Live TV
Loading...
"For all outgoing subscribers seeking settlement and for subscribers seeking withdrawal, the payments are being done inclusive of the interest," the Finance Ministry said in a tweet.
There is no loss of interest for any subscriber.
The interest is being credited in the accounts of all EPF subscribers. However, that is not visible in the statements in view of a software upgrade being implemented by EPFO to account for change in the tax incidence. (1/2) https://t.co/HoY0JtPjII— Ministry of Finance (@FinMinIndia) October 5, 2022
EPF subscribers will get an interest rate of 8.1 percent for 2021-22 in their retirement savings accounts as announced by the government earlier.
The Finance Ministry has issued this clarification in response to a tweet from former Infosys Technologies’ director Mohandas Pai.
Here's the post by Pai (which he did mentioning a Moneycontrol story):
Dear EPFO, where is my interest? @PMOIndia @narendramodi Sir need reforms! Why should citizens suffer because of bureaucratic inefficiency? Pl help @DPIITGoI @FinMinIndia @nsitharaman @sanjeevsanyal https://t.co/jLLpkygbrS
— Mohandas Pai (@TVMohandasPai) October 5, 2022
Earlier, in March this year the Employees' Provident Fund Organisation (EPFO) decided to lower the interest on provident fund deposits for 2021-22 to 8.1 percent from 8.5 percent provided in 2020-21. This is the lowest rate since 1977-78, when it stood at 8 percent.
EPF is one of the most beneficial savings options. Every year the government fixes interest on the amount deposited in this PF account.
A key question that most subscribers face here is how much they would earn from EPF on retirement.
While many assumptions are at play in this calculation, it’s imperative to understand that subscribers can earn a decent amount if they avoid withdrawing from their EPS corpus. The power of compounding further adds to the retirement savings over the long term.
In EPF, employees contribute 12 percent of their salaries, and employers contribute an equal amount, which doubles the monthly savings. The interest earned on the deposit is tax-free.
Going by the rule, the interest here is calculated by adding the monthly running balance and multiplying it with the interest rate and dividing it by 1,200. The EPFO calculates the month-wise closing balance and then the interest for the whole year.
Now, if an employee withdraws a certain sum from the account, then interest from the beginning of the year till the last date of the month preceding the month in which the withdrawal took place is considered.
So, the closing balance for the year will be: Opening balance + contributions -withdrawal (if any) + interest.
Meanwhile, any employee who wants to check their Provident Fund balance online can log in to the official website, send a text message ‘EPFOHO UAN ENG’ to 7738299899, give a missed call at 9966044425, or download and use the UMANG App.
Before checking the balance, one needs to keep the Universal Account Number (UAN) ready. The UAN links and helps a member or subscriber to view details of all Member IDs they have.
ALSO READ | How to read your EPFO account balance statement
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Election Phase 2: Experts decode the key trends and issues in key battleground states
Apr 26, 2024 11:53 PM
2024 Lok Sabha Election | Which way the wind blows in the second phase
Apr 26, 2024 6:09 PM