NEW DELHI: The government has given its nod to credit 8.15 per cent interest in accounts of Employee Provident Funds (EPF) for 2022-23. The approval came through a circular issued by EPFO on Monday.
According to the circular, the Ministry of Labour and Employment has conveyed the approval of the central government to credit interest at 8.15 per cent for the year 2022-23 to the account of each member of the EPF Scheme.
The Central Board of Trustees of EPF in March this year had recommended increasing the interest rate on EPF to 8.15 per cent for 2022-23 from 8.1 per cent in the previous year. According to the trustee recommendations, more than Rs 90,000 crore in interest will be distributed among members’ on the total principal amount of about Rs 11 lakh crore.
The growth in income and the principal amount is more than 16 per cent and 15 per cent, respectively, compared with the previous financial year, as per the labour ministry. There are over 7 crore contributing members in EPF and 77.55 lakh pensioners. The 8.15 per cent interest on EPF for 2022-23 is more than the 7.1 per cent interest paid on Public Provident Fund (PPF), which is a popular long-term investment option for investors.
Interest on EPF is tax-free if the annual member contribution is less than Rs 2.5 lakh. This makes EPF an attractive long-term saving instrument for salaried individuals. Annual contribution towards EPF is also eligible for deduction under Section 80C of the Income Tax Act.