After a prolonged confusion in respect of interest rate on EPF for lakhs of employed people, the Union government finally offered relief by notifying rates on EPF for the fiscal year 2018-19. The interest rate has been decided at 8.65% per annum and with it as much as Rs. 54,000 crore will be credited into the EPF account holders.
The rate for the last fiscal year i.e. 2018-19 has been revised higher by 10 bps or 0.1% as in the previous year it was 8.55%. The rate was, however, the same in the FY 2016-17.
It is to be noted that the Central Board of Trustee of the EPFO approved the rate in end February but its notification has been pending since then as the finance ministry in June put a proposal to cut the rate.
"I am happy to announce that for 2018-19, labour ministry has approved the 8.65% interest rate as suggested by the Central Board of Trustees on 21 February. Our ministry has notified it now and, with this, ₹54,000 crore will be paid as the interest rate for 2018-19," labour minister Santosh Gangwar said in a statement.
In deciding the rate at 8.65%, there were faced three issues, first that the high interest rate of 8.65% in falling interest rate regime does not hold good, second with such an interest payment the EPFO will not be in a position to manage it funds better in the next year and third that subscribers' will remain similar expectation on interest rate in the next year.