It was anticipated that the interim budget, which was unveiled on February 1, would alter the income tax bracket of the salaried class. However, disappointment set in when nothing changed. However, the news that will cheer up 6.5 crore working people has just surfaced. The interest rate on PF deposits was raised by the EPFO on Saturday to 8.25% for 2023–2024. This is 10 basis points more than the 8.15% rate from the previous year. The interest rate for 2021–2022 was 8.10% earlier. This measure will immediately affect the 6.5 crore EPFO customers.
The Ministry of Finance will notify
Under the direction of Labour and Employment Minister Bhupendra Yadav, the EPFO Central Board of Trustees (CBT) authorized the suggested interest rate in the 235th board meeting of EPFO on Saturday. However, no official notification has been issued regarding this yet. The increased interest rate will be notified after getting approval from the Finance Ministry. After this, the interest-rate money will be deposited in the customer’s account by EPFO.
Additionally, there will be an increase in interest rates for VPF.
Following the notification’s release, the 8.25% interest rate will also be applied to VPF. In addition, trusts that are granted exemption in accordance with the regulations are obligated to offer their employees an enhanced EPFO rate. Allow us to inform you that, in a company employing twenty or more people, salaried class employees are required to contribute to the Employees Provident Fund (EPF). The employee contributes to the EPF account with 12% of their monthly pay. Likewise, the employer contributes the same amount to the EPF.
8.33% of the funds went to EPS.
The EPF account is credited with the whole amount withheld from the employee’s pay. 3.67% of the employer’s portion, alone is deposited in the EPF account. The remaining 8.33% of the money goes to the Employee Pension Scheme (EPS). Let us tell you that in the last 10 years, the highest interest rate on PF was in 2015-16. Which at that time was 8.8 percent annually. If 8 percent is agreed upon today, then this interest rate will be the lowest in the last 10 years.
Advantages of PF The government oversees
the Employees’ Provident Fund, or PF, which is a social security program. For workers in the organized sector, it offers retirement financial security. The money invested in PF accrues interest, which the employee may choose to receive as a lump sum payment or as a pension at retirement. The funds deposited into PF can be used to finance home construction or to purchase a home. In addition, PF monies can be applied to children’s schooling. Money deposited into PF can also be used for specific events, like marriage or home remodeling.
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