Speculations are rife that the Employees' Provident Fund Organisation (EPFO) subscribers might get the full employees' provident fund (EPF) interest amount by the end of this month. However, an official confirmation is still awaited on the same.
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As we know, EPF contribution is credited to the account on a monthly basis, and interest is computed every month. However, the total interest for the year is credited at the end of the financial year.
The EPF interest for FY22 is still awaited and many subscribers have taken to social media questioning the same.
Understanding the process
The central board of trustees announces the interest rate for the financial year, and the proposal is then forwarded to the finance ministry for ratification. Once the approval is done, the labour ministry notifies the interest rate and the process of crediting interest into accounts begins.
Then, why the delay?
Experts say that the long paperwork in the case of EPF interest may be the main reason for the delay. However, there is not much information available on the same.
For FY22, the Finance Ministry said that the delay is due to a software upgrade being done to account for changes in the tax incidence.
"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 earlier this month.
The current interest rate
In March this year, the 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 was the lowest rate since 1977-78, when it stood at 8 percent.
EPF interest rate calculation
Going by the rule, the interest here is calculated by adding the monthly running balance, multiplying it by 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.
Checking EPF balance
Once the EPF interest is credited, subscribers can check the same by taking note of their Provident Fund (PF) balance. This can be done by logging in to the official website, sending a text message ‘EPFOHO UAN ENG’ to 7738299899, giving a missed call at 9966044425, or by downloading and using 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.
-- To check the balance online, PF subscribers must visit the EPFO’s official website epfindia.gov.in and go to the ‘Our Services’ tab.
-- On the tab, select the 'For Employees' option.
-- When a new page opens, the subscriber must click on 'Member Passbook' and enter details like the Universal Account Number (UAN) and password.
-- Once the passbook opens, it will reflect the employer’s contribution, the individual’s contribution and the interest earned. Those who have been employed in more than one organisation will have to check different member IDs.
ALSO READ | How to read your EPFO account balance statement
First Published: Oct 27, 2022 11:42 AM IST
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