Labour minister Bandaru Dattatreya these days said that the finance ministry has approved 8.65 per cent rate of interest on EPF deposits for 2016-17.
The minister’s remark has laid to rest apprehensions among formal sector staff that they would get decrease fee of hobby than the 8.65 per cent approved by means of the workers’ Provident Fund organization’s (EPFO) trustees in December ultimate 12 months.
The ratification of the eight.65 per cent passion on EPF will allow the retirement fund body EPFO to credit this charge of return into the bills of four crore subscribers.
“Finance Ministry has agreed to 8.65 per cent charge of passion. Now, the communication will come. The formal discussions are over,” the minister said on the sidelines of national safety Awards perform.
“we can immediately difficulty the notification and credit score the rate of interest to over 4 crore subscribers,” he brought.
The minister additionally said that the bill to amend payment of gratuity Act so as to double the ceiling of tax-free gratuity to Rs 20 lakh, would quickly be positioned sooner than the Union cupboard for approval.
the employees’ Provident Fund enterprise trustees had licensed 8.sixty five per cent charge on EPF in December closing year.
The Finance Ministry has been nudging the labour ministry to decrease the EPF price for aligning it with the charges of small savings schemes like PPF.
earlier, a source had said that in a communique to the labour ministry, the finance ministry has requested the previous to provide the rate of pastime authorized via the EPFO trustees, equipped there must not be any deficit to the fund.
Dattatreya has been maintaining that EPFO subscribers be supplied 8.65 per cent charge of interest for 2016-17.
“The imperative Board of Trustees (CBT) had determined to present eight.sixty five per cent. we’d have surplus of Rs 158 crore on providing 8.65 per cent. i’ve requested them to approve 8.sixty five per cent. finally, this amount (interest earnings) will likely be given to staff,” Dattatreya had said earlier this month.
As per the follow, the board’s determination is concurred by way of the Finance Ministry after evaluating whether or not the EPFO would be able to provide the speed approved by means of trustees via its personal earnings or not.
as soon as the Finance Ministry ratifies the speed of hobby approved via the CBT, it is credited into the account of EPFO members for that particular monetary yr.
The Finance Ministry had last year determined to lower the EPF interest rate of 8.8 per cent for 2015-16 as licensed through the CBT, to eight.7 per cent. the choice drew flak from all quarters forcing the government to uphold 8.eight per cent.
The Finance Ministry has been asking the Labour Ministry to rationalise the EPF rate of interest in view of reducing of returns on various administered savings schemes like PPF.
the federal government generally ratifies the rate of return licensed by way of the CBT because the EPFO is an self sustaining physique and gives hobby on EPF deposits from its own income.