EPFO Board to discuss interest rate on Mar 25-26

Though the agenda for the meeting is yet to be officially circulated, people in the know said the interest rate is unlikely to go below 8 per cent level amid a rising interest rate scenario.

In March 2022, the CBT had recommended a four-decade low interest rate of 8.1 per cent for over 6 crore active subscribers of the EPFO for the financial year 2021-22, leaving it with an estimated surplus of Rs 450 crore. In June 2022, the finance ministry had then ratified the interest rate. FY22 is the first financial year when the Centre’s proposal to tax interest on higher contributions to the EPF will come into effect. Several subscribers had reported delays in crediting of interest rate for FY22.

In an interview with The Indian Express in February, Labour and Employment Minister Bhupender Yadav had said that the rate for FY23 will be determined on the basis of contributions and withdrawals. “It should be appreciated that the interest is determined based on the contributions received in EPF accounts, withdrawals made by EPF members, income received during the year. Rate will be recommended before the close of the financial year as per the scheme provisions. Hence, it will be taken up in CBT during the concluding month of the financial year,” he had said.

On the issue of delay in interest rate crediting, Yadav had said that with the introduction of the new TDS provision, the accounting process had to undergo a major revision, making the exercise more tedious warranting an enhanced level of scrutiny.