EPF Interest Rate

EPF Interest Rate 8.5% on PF Deposit for 2019-20 EPFO cuts Interest Rate

EPF Interest Rate Lowered to 8.5% on PF Deposit for 2019-20. EPFO cuts Interest Rate from 8.65% to 8.55% fro 2017-18. PF Interest Rate cuts to 8.55% for 2017-18 from 8.65% for 2016-17.

EPF which is nothing but the lump sum amount given to an employee while he/she is leaving the organisation i.e. Employee provident fund and it is different from pension fund. This was governed by EPFO – Employees Provident Fund Organisation (EPFO). Read the article completely to know more about the EPF interest rate for the financial year 2019 -2020.

On 6th March,2020, EPF has reduced the interest rates for this fianancial year 2019-20. According to an official from labour ministry, Employees’ Provident Fund Organisation (EPFO) is likely to lower interest rate on provident fund deposits for this fiscal 8.5% per cent provided to its members during 2019-20. EPFO has reduced interest rate on deposits to 8.55% for the financial year 2017-18 from 8.65% for 2016-17.

EPF Interest Rate for FY 2019-20

Labour Minister Santhosh Kumar Gangwar said that the new interest rate will result in surplus of of over 700 crore rupees for the current financial year. The exact words of Santhosh Kumar Gangwar were “Last time, we had given interest rate that exceeded people’s expectations. But, keeping everything in mind, there is no shortage of money but we have decided to fix interest rate at 8.5% so we don’t face any issues in future. The finance ministry has been reportedly nudging the labour Ministry for lowering the EPF interest rate. The EPFO has investments of more than 18 lakh crore. Lowered rates on PF could be a direct result of the economic slowdown. The earnings on long term fixed deposits bonds and government securities are down 50-80 basis points in the last one year.

It is noteworthy that recently, EPFO approved an accounting policy for valuation and accounting of equity investments which was formulated in consultancy with IIM Bangalore.

EPF Interest Rate 8.55% on PF Deposit for 2017-18

As EPFO is planning to directly credit units of Exchange Trade Funds (ETF) into provident fund accounts which may result in lower yields on other investments more particularly bonds, interest rate cut is likely to happen.

However, the official added that EPFO is yet to work out the income projection for the current fiscal based on which interest rate cut will be decided.

The policy is to enable the EPF body to credit ETFs units into the provident fund accounts of the subscribers by the fiscal end, thereby to enable every account holder to see his/ her provident fund balance in the form of cash balance and ETF units.

Members of EPFO will only be able to realize the entire returns on the equity linked investments at the time of withdrawals even though the dividends on ETFs are credited into the subscribers’ accounts on timely basis.

At the same time, subscribers will also have an option to withdraw money while taking advances from their accounts, by liquidating ETF units or from cash component.

The finance ministry has been pushing the labour ministry to adjust the EPF rate at per with its small saving schemes like public provident fund. In the month of February 2018, the trustees of EPFO had decided to lower the rate of interest on EPF to 8.55 per cent for 2018-19 from 8.65 per cent provided for 2016-17. In case, the TDS rates are changes we will intimate you. Keep visit our website at epfbalance.net for latest information..

For more details visit EPF India official website at epfindia.com

Calculate PF Amount for Salaried Employees, EPF Interest Rates

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Calculate PF Amount for Salaried Government/ Private Employees. Calculate Interest rates on EPF. How to calculate PF amount for Employees.

Employee provident fund is under the government control and is run to the benefit of the employees. Both the employee and the employer will contribute to the employee provident fund and the total aggregate amount of the employees provident fund will be given to the employee after once the employee get their retirement. The employee provident fund will always work for the employees benefit and it is a huge amount for the employees to spend their life after their retirement. The employee provident fund is run by the employee provident fund organization, and always will strive to strengthen the relationship between the employees and the employer.

The employee provident fund organization will provide various services to its employees; it makes sure that the employees are not exploited by the employer in some or the other ways. It helps the employees for easy transfer of the EPF account from one employer to another employer.

calculate PF Amount

The fund has the total aggregate of the contributions that are made equally by both the employee and the employer. The employee provident fund organization will make the fluctuations in the interest rate. Employee will contribute 12% and the employer will contribute 12% of their basic pay to the EPF fund. The below is the article defining you all the employee provident fund calculation and also the interest calculation. Go through the article completely to have a clear idea about EPF fund calculation.

A method is to be followed to calculate the provident fund amount for salaried employees or the private employees.

Calculate PF Amount for employees, Check EPF Interest Rates

The contribution made by the employer is divided as per the below ways:
3.67% – Employee Provident Fund.
8.33% – Employee Pension Scheme (EPS).
0.5% – Employees Deposit Linked Insurance Scheme (EDLI).
0.01% – EDLIs administrative charges.

The below is the easy calculation for provident fund account:

If the person’s salary is 10000 then the provident fund is calculated as below:

Employees monthly basic salary + Dearness Allowance: Rs.10000/-
Employee contribution toward EPF will be 10000* 12% = 1200/-
From the employer’s contribution the 12% will be divided to 3.67% of the amount contributed to EPF and 8.33% will be contributed to the EPS. Hence the employee provident fund contributed will be 10000* 3.67% = 367/-

These two amounts will be summed up to become the employee’s monthly contribution by both the employee and the employer.

For every month the interest for the amount in the account is calculated and then it is added up to the EPF account. For the first month starting, the amount in the account is zero at the starting of the month and so the interest for that month will also be zero and in such case, the second month interest will be calculated basing on the amount that is there at the end first method.

Hope the article is useful and is informative and you have gained some information regarding the calculation of the employees EPF. Do follow the page for more details about the employee provident fund and the organization.

Tax Deduction/ Exemption TDS on PF Withdrawal, EPF Saving Tips

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Tax Deduction/ Exemption TDS on PF Withdrawal, EPF Saving Tips. No Tax Deduction for PF Withdrawal of up to Rs.50,000 from June 1st.
The Government has notified that, raising the threshold limit of PF withdrawal amount from 30,000/- to 50,000/-. Under the “Finance Act, 2016 amended section 192A of Income Tax Act, 1961 to raise the threshold limit of PF withdrawl from 30k to 50k for tax deduction at source TDS. These provision will come into effect from June 1, 2016. There are some provisions related to TDS, employee’s will exempted to pay the TDS on withdrawl of EPF amount from their own account.

TDS on PF Withdrawal

Tax Deduction/ Exemption/ TDS on PF Withdrawal, Benefits of Employee’s EPF Account :

TDS will not be deducted in case of transfer of an amount from one account to another account.
If an employee withdrawal PF after a period of 5 years period, there will be no tax deducted.
When an employee has submitted Form 15G/ 15H, then TDS is not deducted. Because these are declaration forms, means that their income would not be taxable.
When an employee discontinues/ not doing the job due to health problem, they will be exempted from TDS.
When an employee working in contractual basis/ working on project, there will no TDS. These employee’s can
withdrawl the PF amount after completion of contract/ project.
And also, an employee can closed their business, at the time there is no TDS deducted.

TDS on PF Withdrawal Tax Deduction

Tax Deduction/ Exemption Rates TDS on PF Withdrawal Amount

EPF account holder/ existing provisions can withdrawl more than the limit of their own amount on with submitting of PAN card details and 15G/ 15H forms, they can pay the TDS rate at 10 percent.
TDS is deducted at the maximum marginal rate of 34.608 percent, if an employee fails to submit PAN of Form 15G / Form 15H.
However, EPFO has given certail exemptions to deduction of TDS.
TDS will be deducted under section 192A of Income Tax Act, 1961 at the time of payment on PF amount.
Both the forms of 15G and 15H are self declaration forms.
15G Form is for below 60 years of age and have no taxable.
15H Form is for senior citizens of 60 years and above of age.

When, an employee has not completed their 5 years working service, they can withdrawal the amount of less than 50,000/- from their PF account. In case of an employee can withdrawal more than/ equal amount of 50,000/-, they can submit the form of 15G/ 15H and PAN card Details.

For more details visit EPF official website at epfindia.gov.in