Skip to main content

EPFO interest rate for 2017-18 at 5-yr-low of 8.55%; FinMin clears proposal

By
EPFO interest rate for 2017-18 at 5-yr-low of 8.55%; FinMin clears proposal
With rates of all small savings schemes, including the Public Provident Fund, going down in the past year, EPFO's return of 8.55 per cent is still the best rate
The finance ministry on Thursday approved for 2017-18 an interest rate of 8.55 per cent on provident fund savings administered by the Employees’ Provident Fund Organisation (EPFO) for around 200 million formal sector workers.“The finance ministry has approved the interest rates according to the decision taken by EPFO's central board of trustees. However, they have also given us some suggestions informally,” a senior labour ministry official said.
The EPFO trustees, headed by Minister of State for Labour and Employment Santosh Gangwar, had announced at a meeting on February 21 a five-year-low interest rate of 8.55 per cent for 2017-18. EPFO had paid returns of 8.65 per cent on provident fund savings for the previous year, and 8.8 per cent in 2015-16. In the two preceding years – 2013-14 and 2014-15 – the interest rate for EPFO subscribers had stood at 8.75 per cent.
However, with rates of all small savings schemes, including the Public Provident Fund (PPF), going down in the past year, EPFO’s return of 8.55 per cent is still the best rate. In December, the government had cut rates on small savings schemes by 20 basis points.The finance ministry's consent came over a month after it wrote to the labour ministry raising a few questions over the EPFO trustees’ decision to give 8.55 per cent interest rate in 2017-18
.Apart from asking EPFO to keep a higher surplus, it had also recommended creating a reserve fund to ensure the government did not have to fund the losses in case EPFO “mismanaged” its investments. However, the labour ministry has so far not agreed to the suggestions given by the finance ministry. In fact, EPFO had responded to the finance ministry saying it had never run into losses and was not required to keep a surplus under the Employees’ Provident Fund and Miscellaneous Act, 1952
.Even then, at 8.55 per cent interest rate, the EPFO will retain a surplus of Rs 8.5 billion. EPFO has been keeping a portion of its income as surplus of income over liability. 
The Business Standard, New Delhi, 28th April 2018

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more