Employees’ Provident Fund Organisation (EPFO) will likely announce the interest rates on Provident Fund deposits for the financial year 2020-21 on March 4, following the Central Board of Trustees (CBT) meeting in Srinagar.
KE Raghunathan, an EPFO trustee, had earlier told in February that he had received the intimation that the next CBT meeting is scheduled to be held on March 4, at Srinagar and that the agenda papers are likely to be sent soon. He added that there was no mention of discussion on the interest rate for 2020-21 in the intimation mail, Moneycontrol reported.
There are speculations about lower interest on provident fund deposits due to economic downfall in the last due to Covid-19 pandemic. The interest rate announced in 2019-20 by EPFO was at a seven-year low of 8.5 percent for 2019-20, from 8.65 percent in 2018-19.
The retirement body had said that the 8.5 percent interest would be paid in two installments - 8.15 percent from debt investments and 0.35 percent from equity.
“It would comprise 8.15% from debt income and the balance 0.35% (gains) from the sale of ETFs (exchange-traded funds), subject to their redemption by 31 December 2020", EPFO had said earlier.
Finance Minister Nirmala Sitharaman had announced during her Budget 2021 speech that depositors investing more than Rs 2.5 lakh in EPF in a year would have the interest liable for tax.
“In order to rationalise tax exemption for the income earned by high income employees, it is proposed to restrict tax exemption for the interest income earned on the employees’ contribution to various provident funds to the annual contribution of Rs 2.5 lakh," Sitharaman said during the Budget speech on February 1.