The Finance Ministry has said there is no loss of interest rate for EPFO subscribers and the delay in crediting interest for the last fiscal is due to software upgrade being conducted.
It further said that for all outgoing subscribers seeking settlement and also those withdrawing their deposits, the payments are being done inclusive of the interest. ”There is no loss of interest for any subscriber. The interest is being credited in the accounts of all EPF subscribers. However, that is not visible in the statements in view of a software upgrade being implemented by EPFO (Employees’ Provident Fund Organisation) to account for change in the tax incidence,” the ministry tweeted late on Wednesday night.
The ministry said this on Twitter in reply to a tweet by IT industry veteran TV Mohandas Pai, who raised queries on interest in the Employees’ Provident Fund deposits. ”For all outgoing subscribers seeking settlement and for subscribers seeking withdrawal, the payments are being done inclusive of the interest,” the ministry noted.
Earlier in June, the government approved an 8.1 per cent interest on EPF deposits for the 2021-22 fiscal ended March 31 to over 5 crore subscribers. The 2021-22 (April-March) was the first year when a tax on interest on contributions beyond Rs 2.5 lakh per annum to provident fund was introduced.
In her Budget for 2021-22, Finance Minister Nirmala Sitharaman had provided that interest on employee contributions to provident funds over Rs 2.5 lakh per annum would be taxed from April 1, 2021.