EPFO likely to credit 8.5 per cent interest on EPF for 2019-20 by Dec

Retirement fund physique EPFO is more likely to credit score 8.5 per cent price of curiosity for 2019-20 within the workers’ provident fund (EPF) accounts of round six crore subscribers in a single go by the top of December.

Earlier in September this yr, the Employees Provident Fund Organisation had determined to separate 8.5 per cent curiosity into two installments of 8.15 per cent and 0.35 per cent in its trustees meet headed by Labour Minister Santosh Gangwar.

A extremely positioned supply advised PTI that the Labour Ministry has despatched a proposal to the Finance Ministry to offer concurrence to credit score 8.5 per cent price of curiosity on EPF for 2019-20 earlier this month.

“The Ministry of Finance ratification is likely in few days. Thus the interest is likely to be credited by this month only.” The supply additional stated that earlier the Ministry of Finance had sought some clarifications on the speed of curiosity for the final fiscal, which have been duly addressed.

In March this yr, the EPFO’s apex resolution making physique Central Board of Trustees headed by Labour Minister Santosh Gangwar had authorised 8.5 per cent rate of interest on EPF for 2019-20.

In a digital CBT assembly in September, the EPFO had determined to honour its dedication to supply 8.5 per cent price of curiosity for the final fiscal. But the CBT had additionally determined to separate the speed of curiosity into two installments of 8.15 per cent and 0.35 per cent in view of the pandemic.

The labour ministry had then defined that “in view of exceptional circumstances arising out of Covid-19, the agenda regarding interest rate was reviewed by the CBT and it recommended the same rate of 8.50 per cent to the Central Government.

“It (8.5 per cent interest) would comprise of 8.15 per cent from debt income and balance 0.35 per cent (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020,” it had stated.

The CBT had advisable accounting such capital good points (from sale of ETFs) within the earnings of the monetary yr 2019-20 as being an distinctive case.

As deliberate earlier, the EPFO had to supply 8.15 per cent curiosity on EPF quickly after in search of Ministry of Finance nod. It has deliberate to credit score the remaining 0.35 per cent price by December 31, after proposed liquidation of ETFs.

The EPFO had earlier deliberate to liquidate a few of its funding in ETFs to supply 8.5 per cent curiosity for the final fiscal.

However, it couldn’t accomplish that due to the uneven market situations amid the lockdown, induced by Covid-19.

The supply additionally advised that for the reason that market situations are greater than beneficial as bench mark indices are at document excessive, there shouldn’t be a difficulty to credit score whole 8.5 per cent in a single go.