EPF interest rate fixed at 8.15% for FY 2022-23 by EPFO: Sources If this interest rate is finalised by the Central Board of Trustees (CBT), then there is hike in interest rate by 0.05%. The EPFO board is meeting for two days to decide the interest rate on EPF account
The Employees Provident Fund Organisation (EPFO) has fixed the interest rate at 8.15% for financial year 2022-23 as per the sources quoted by news agency PTI. If the expected interest rate is same as reported by the sources, then there is a hike in the EPF account interest rate by 0.05%. Last year, the interest rate for EPF account was 8.10% for FY 2021-22.Do note that once the interest rate is fixed by the Central Board of Trustees (CBT), the finance ministry is supposed to notify it for the interest rate to come into effect. Once the interest rate is notified, only then EPFO will start crediting the interest rate to the EPF accounts. This notified interest rate will be applicable on Voluntary Provident Fund (VPF) deposits as well. Those employees whose EPF accounts is with the exempted trust will also receive this interest rate on their EPF deposits.
EPFO fixes 8.15 pc interest rate on employees' provident fund for 2022-23: Sources
— Press Trust of India (@PTI_News) 1679978527000The Employees Provident Fund is a mandatory contribution for salaried employees. An employer is also required to make the matching contribution to the EPF account. An employee makes 12% of his wages contribution to the EPF account on monthly basis. The employees full contribution is deposited to the EPF account. In case of employer, only 3,67 percent is deposited to the EPF account. The balance 8.33% goes towards the Employees Pension Scheme (EPS).
The decision on interest rate on EPF deposits for financial year 2022-23 comes at a time when the retirement fund body is still crediting the interest in EPF account for previous financial year i.e., 2021-22.
An employee whose EPF account is managed by the EPFO can check the account balance using following four ways:
a) By using Umang app
b) By visiting EPF member e-sewa portal
c) By giving missed call
d) By sending SMS
If an employee's account is managed by the exempted trust, then one should ask their employer to provide the EPF statement to know the balance.
If the interest rate is not still reflecting in your EPF account, then one can raise the complaint to the EPFO. The complaint can be raised either by visiting EPF i-gram portal or via Whatsapp. In case of exempted trust under EPFO, one needs to raise the complaint to the employer.
Do note that interest earned on EPF and VPF account will be taxable if the total deposits exceeds Rs 2.5 lakh in a financial year.
The meeting by CBT, EPFO is also crucial as the retirement fund body may seek to simplify the process of applying for higher pension by eligible EPF members. The Supreme Court in its judgement dated November 4, 2022, has allowed one time option to the eligible EPF members opt for higher pension from the EPS. The EPFO has issued circulars on the same on December 29, 2022 and February 20, 2023. However, the documents required are making it difficult for the eligible EPF members to apply for higher pension. Further, the EPFO is yet to issue the circular clarifying the manner in which pension will be calculated for those applying for higher pension.
The EPFO, in its notification in August 2014, removed the option to opt for higher pension if the wages exceed the relevant ceiling. Further, if an employee's wages at the time of joining the EPF scheme, exceeds the relevant ceiling, then he/she cannot become member of EPS. Currently, if an employee's basic monthly salary at the time of joining the EPF scheme exceeds Rs 15,000, then he/she cannot become member of pension scheme.
As per news reported in The Economic Times, the government is planning to raise this wage ceiling limit to Rs 21,000 from Rs 15,000 per month currently.
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This story originally appeared on: India Times - Author:Faqs of Insurances
