EPFO Interest Rate Announcemen: As recommended by EPFO, 8.25 percent as interest on Employees’ Provident Fund will remain for FY 2024-25 just as last year FY 2023-24. The EPFO clarified that the interest rate will be notified in official government notifications after making recommendations by the Central Board of Trustees, post which EPFO will deposit the said interest in accounts.
Calculation of EPFO Interest
Few people might know that the interest calculation on EPF is made as per the calculation and accrual of balance in the PPF. Under Para 60 of the EPF Scheme, 1952, such a way is completed at the end of every month for the amount deposited in the account. Interest, however, is credited towards the end of the financial year.
EPFO Interest Rate Announcement
The interest rate on EPF is usually declared by EPFO in the last month of the fiscal year. However, the interest takes time for crediting into the accounts due to the proposal being sent from the Ministry of Labor to the Ministry of Finance, which notifies after the approval of the Finance Ministry. Thereafter, the process of depositing interest into the hands of the EPF members starts.
Interest calculation on EPF deposits
Assuming that a deposit of Rs. 2,00,000 remains in your EPF account as on 1.4.2024. The basic salary for the financial year 2024-25 is expected to be Rs. 40,000 pm. Under EPF rules, 12 percent of the basic salary of the employees is deposited in the EPF account. Simultaneously, the same amount goes into your account from the employer (company). Nevertheless, out of the employer’s contribution of 12 percent, 8.67 percent goes into the Employees’ Pension Scheme (EPS) account, capped at Rs. 1,250 per month, and the remaining amount goes to the EPF account.
An example proposition
On a basic salary of Rs. 40,000, the employee is contributing at the rate of 12 percent, Rs. 4,800, and the company, Rs. 3,550, making a total contribution of Rs. 8,350 to your PF account every month.
- On June 2024, Rs 1547.22
- On July 2024, Rs 1604.63
- On August 2024, Rs 1662.03
- On September 2024, Rs 1719.44
- On October 2024, Rs 1776.84
- On November 2024, Rs 1834.25
- On December 2024, Rs 1891.66
- On January 2025, Rs 1949.06
- On February 2025, Rs 2006.47
- On March 2025, the total deposit amount will be Rs 30,0200. On this, interest will be given in the amount of Rs 2063.88.
- Thus, a total of Rs 20,977.69 will be credited as interest in your EPF account for 12 months.
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