The Finance Ministry has given great news to the employed people before Diwali.
The Finance Ministry has put the final stamp on the PF interest of the employees.
The Finance Ministry has approved 8.5 percent interest rate on Provident Fund ie PF today i.e. on 29 October 2021.
This interest on PF has been approved for the financial year 2020-2021.
Retirement fund organization EPFO had recommended 8.5% interest on PF for the financial year 2020-2021.
This has been accepted by the government or the government today.
On March 4, 2021, the EPFO had proposed to the government to keep 8.5 percent interest rate for the financial year 2020-2021.
Interest can be received till Diwali
The Labor Ministry starts paying interest on PF only after the approval of the Finance Ministry.
After this approval of the Finance Ministry, now EPFO will transfer interest to 6 crore account holders.
It is expected that by Diwali this interest will come to the PF account of the employees.
How is interest calculated in PF
The interest rate in PF account is calculated on a monthly basis. However, the interest is transferred to the PF account on an annual basis on 31st March.
The transfer interest is clubbed with the balance of the next month i.e. April. Thereafter interest is calculated on the total amount.
Important rules of PF
If the contribution is not made to the PF account for 36 consecutive months (up to 3 years), then the account becomes inactive.
The employees who have not attained the age of retirement are paid interest on dormant accounts.
Interest is not paid only on the amount deposited in dormant accounts of retired employees.
Features of EPF
12 percent of the company’s employees and employees also give the same amount in this fund.
The total contribution from the company’s side is divided as 8.33 per cent for Employees’ Pension Scheme and 3.67 per cent for Employees’ Provident Fund.
The contribution made by the employee completely goes to the provident fund of the employee.