EPFO board meet immediately: Sub-8.5% fee could also be finalised

The Central Board of Trustees of retirement fund physique Employees’ Provident Fund Organisation (EPFO) is prone to finalise the rate of interest for monetary 12 months 2020-21 in a gathering on Thursday. The Board is prone to contemplate a decrease rate of interest than the seven-year low of 8.5 per cent paid out to its subscribers for the earlier monetary 12 months.
CBT members mentioned a gathering was held earlier than the assembly on Wednesday the place discussions on the funding portfolio of the retirement fund physique passed off. The suggestion for the rate of interest difficulty is anticipated within the assembly slated to be held in Srinagar on Thursday. The Board is anticipated to decrease the rate of interest than final 12 months’s degree in view of upper variety of withdrawals and decrease contributions within the aftermath of the pandemic.
Till December 31, 2020, the EPFO had settled 56.79 lakh claims value Rs 14,310.21 crore supplied beneath the advance facility after the Covid-19 pandemic. 197.91 lakh remaining settlement, demise, insurance coverage and advance claims value Rs 73,288 crore had been settled throughout April-December FY12. Exempted institutions, which run their very own PF trusts, had additionally settled 4.19 lakh claims disbursing Rs 3,983 crore.
In March final 12 months, the CBT — headed by Labour Minister Santosh Gangwar — had advisable 8.5 per cent rate of interest for EPF subscribers for 2019-20. Then, that September, the CBT advisable splitting cost of the rate of interest of 8.5 per cent for monetary 12 months 2019-20 into two elements, citing “exceptional circumstances arising out of Covid-19.” However, EPFO started to credit score it in a single go from January.

The Finance Ministry has been nudging the EPFO to cut back the speed to sub-8 per cent degree consistent with the general rate of interest state of affairs. Small financial savings charges vary from 4.0-7.6 per cent, which have been saved unchanged for the January-March quarter. It had questioned the 2018-19 rate of interest of 8.65 per cent as nicely, moreover the EPFO’s publicity to IL&FS and related dangerous entities.
The authorities, within the Budget for FY22, has proposed taxing curiosity on larger contributions to the EPF. Interest on provident fund contributions exceeding Rs 2.5 lakh per 12 months might be taxed starting the following monetary 12 months.