The Employees’ Provident Fund Organization (EPFO) will deposit a lump-sum of 8.5 percent interest in the Employees Provident Fund (EPF) accounts of around six crore shareholders for the financial year 2019-20, till the next seven days i.e. 31 December. Earlier in September, at a meeting of trustees led by Labor Minister Santosh Gangwar, the EPFO decided to put the interest in two installments of 8.15 per cent and 0.35 per cent.
A highly placed source said that the Labor Ministry has sent a proposal to the Finance Ministry to add 8.5 percent interest at a time to the EPF for 2019-20. This proposal has been sent this month. The source said that the finance ministry’s approval on this proposal is expected in a few days. In such a case, interest will be credited to the accounts of shareholders before January 1 of this month.
Employees and employers deposit 24 percent of the basic pay and Dearness allowance in the Employees Provident Fund Organization (EPFO). EPFO withdraws interest on PF and deposits it in the account of the beneficiaries. Big Newz: EPFO subscribers increase 56% in October
Such interest is calculated
if any amount is withdrawn during the current year, then the interest amount is taken from the beginning of the year to the month immediately before the withdrawal. Your year’s balancing balance will be its opening balance + contribution-withdrawal (if any) + interest is withdrawn.
For example, if the interest rate is 8.65% and the opening balance is Rs 1,12,345 and Rs 25,000 out of PF, then the calculation would be like this. If the opening balance is Rs 1,12,345, then the total monthly balance will be ₹ 11,04,740. The interest will be 1104740 X (8.65 / 1200) = ₹ 7,963. In this way, the closing balance of the year will be Opening Balance + Contribution-Withdrawal + Interest ₹ 1,12,345 + ₹ 1200 – 25000 + ₹ 7963 = ₹ 96,508
