The government has increased the interest rate on deposits in PF account by 0.05% from 8.10% to 8.15% for the financial year 2022-23. Employees’ Provident Fund Organization (EPFO) issued its office order on Tuesday. Let us know about it in detail.
For the financial year 2021-22, the government had reduced the interest rate on PF to 8.10 per cent, which was the lowest level in 43 years. About 6 crore employees of the country come under the ambit of PF.
Understand here how much interest will be available on PF now
Under the EPFO Act, 12% of the basic salary plus DA of the employee goes to the PF account. So at the same time, the company also contributes 12 percent of the employee’s basic salary plus DA. Out of the 12% contribution of the company, 3.67% goes to the PF account and the remaining 8.33% goes to the pension scheme. All the money contributed by a single employee goes to the PF account.
In such a situation, suppose that till March 31, 2023 (opening balance of the financial year 2023-24), a total of Rs 5 lakh is deposited in your PF account. In this case, if you get interest at the rate of 8.10 percent, then you get Rs 40,500 as interest on 5 lakh. But now by increasing the interest rate to 8.15 percent, you will get an interest of Rs 40,750.
Started in 1952 with 3% interest
In 1952, the interest rate on PF was only 3 percent. However, after that it kept increasing. It reached above 6% for the first time in 1972. In 1984 it reached above 10% for the first time. The best time for PF holders was from 1989 to 1999.
During this, 12 percent interest was available on PF. After this the interest rate started decreasing. Interest rates have never been close to 10% since 1999. It has remained below 9.50% since 2001. It has been at or below 8.50% for the last seven years.
The interest rate is fixed at the end of the financial year.
The first meeting of the Finance Investment and Audit Committee has been held to fix the interest rate in PF. It gives an account of the wealth accumulated in this financial year. After this there is a CBT meeting. After the decision of the CBT, the interest rate is applicable after the concurrence of the Ministry of Finance. The interest rate is fixed at the end of the financial year.
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