Interest rate on PF deposits may be near 8% for FY23
New Delhi: The government may peg the interest rate on provident fund deposits at nearly 8% for 2022-23, almost at the same level as in the previous fiscal, people familiar with the matter told ET.They said the earnings of the Employees' Provident Fund Organisation were being worked out but 8% was doable considering higher returns on investments this year."Return on EPFO investments this year have been strong with reduced withdrawals on account of Covid-19 pandemic. Even investments in equity are expected to fetch better returns than last year, making a clear case of either retaining the interest rate at 8.1% or bringing it a tad lower to 8%," a senior government official said on the condition of anonymity. Another official said raising the interest rate beyond 8.1% will widen the difference between PF rates and rates on public provident fund (PPF) and general provident fund (GPF) which stands at 7.1%."The government will stick to around 8% to avoid any political backlash as it heads into key state assembly elections this year, followed by general elections next year," the second official added.The central board of trustees of EPFO is expected to meet later this month or in early March to decide on the interest rate that will be recommended by its Finance Investment and Audit committee based on the earnings for 2022-23. The retirement fund body had announced the interest rate of 8.1% for 2021-22, which was the lowest in four decades and was significantly lower than 8.5% credited in the preceding year. This was on an estimated income of ₹76,768 crore with ₹450 crore as surplus. Exchange Traded Fund The CBT is also expected to take a call on the threshold on redemption of exchange traded funds at its upcoming meeting.It had in its last meeting in October 2022, proposed fixing a threshold on ETF redemption to ensure minimum returns and better payout to its subscribers. EPFO started investing in equities in 2015-16, starting with 5% in the first year, 10% in the second year and 15% in the subsequent years. Source link https://www.infinitycompliance.in/product/online-company-registration-in-india/ Read the full article
