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Even though the Central Board of Trustees (CBT) of retirement body EPFO had decided on an 8.8% interest rate, the Finance Ministry has lowered it and approved an 8.7% interest on PF deposits for over 5 crore subscribers. 
 "The (EPFO's apex decision-making body) CBT, at its meeting held in February 2016, has proposed an interim rate of interest at 8.8 per cent to be credited to the accounts of Employees' Provident Fund subscribers for 2015-16. The Ministry of Finance has, however, ratified an interest rate of 8.7 per cent," Labour Minister <keyword id="115762" type="PERSON" weightage="100" keywordseo="Bandaru-Dattatreya">Bandaru Dattatreya</keyword> said in a written reply to the Lok Sabha today. 
 
This is probably the first time that such thing has happened, when the Finance Ministry has not agreed to the CBT’s rate of interest. 
 
Earlier, EPFO had provided 8.75% rate of interest in 2013-14 and 2014-15, 8.5% in 2012-13 and 8.25% in 2011-12. 
 
As per EPFO's estimates worked out in September, it can easily pay 8.95% rate of interest, leaving a surplus of Rs 100 crore. 
 
<a href="http://economictimes.indiatimes.com/photo/51011641.cms">Image source</a>

Finance Ministry lowers proposed PF interest rate to 8.7% for the first time

Relief for those who wanted to draw out their premature <keyword id="45028" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund">provident fund</keyword> (PF) withdrawals of Rs 30,000 or more as the <keyword id="47209" type="ORGANIZATION" weightage="80" keywordseo="Finance-Ministry">finance ministry</keyword> is reconsidering its Budget provision to tax such withdrawals, even as the 2015 Finance Act has been notified and deduction of tax at source from PF accounts settled before five years of service, comes into force from June 1. 
 

	The finance ministry might issue a directive to put the implementation of this clause in the Finance Act on hold or raise the Rs 30,000 trigger for tax deductions from PF accounts, a senior official said. "The government is mulling two options to hold back the implementation of this tax, after the PF office pointed out that it would be unfair to tax retirement <keyword id="25450" type="UNKNOWN" weightage="60" keywordseo="savings">savings</keyword> of people whose income is less than the personal <keyword id="6354751" type="COMPANY" weightage="80" keywordseo="Income-Tax">income tax</keyword> threshold of Rs 2.5 lakh," the senior official told the Economic Times. 
	 

	Meanwhile, the PF department has ordered all offices to be ready to deduct tax from all premature PF claims settled from June 1 as the decision is expected by the end of this month. 
	 

	"Tax will be deducted at 10% if members submit their PAN card details and at the maximum marginal tax rate of 34.608% if a member fails to submit PAN. Only in cases where a member submits Form 15G or 15H, no tax will be deducted," the official said. 
	 

	Form 15G is a self-declaration document for individuals having non-taxable income, while Form 15H is a similar declaration by senior citizens (over the age of 60 years). However, these forms won't be accepted as a valid defense for avoiding tax deductions in case of PF accounts with balances of Rs 2.5 lakh (for those with no taxable income) and Rs 3 lakh for retirees. According to the Employees' <keyword id="122254" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword> (<keyword id="6372438" type="ORGANIZATION" weightage="80" keywordseo="EPFO">EPFO</keyword>), no tax will be deducted if the PF savings are transferred to another PF account. 
	 

	Moreover, no tax would be deducted on their PF withdrawals in special cases. If an employee had to leave service due to bad health or other factors beyond their control such as a slowdown or shutting down of the employer's business, no tax will be deducted. 
	 

	Personal income tax is payable for those earning Rs 2.5 lakh or more annually. An EPF account is mandatory for all employees earning up to Rs 15,000 per month in companies having over 20 workers. As per the law, 24% of an employee's salary is diverted to her or his PF account. 
	 
	(Image: Indiatimes)

Relax! The govt won't tax you just yet for withdrawing your PF before 5 yrs

<ul><li>After a rate cut in February, the mandate of the central bank was clear: it wants to boost lending and thereby stimulate economic growth. </li><li>However, the country’s commercial lenders have been slow to pass on the rate cut to consumers. </li><li>As a result, the governor of the Reserve Bank of India, <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword>, met with the CEO’s of the country banks to do so. The banks complained that they didn’t have much room to cut rates but said they would try their best. </li></ul>After <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">a rate cut </a>in February, the mandate of the central bank was clear: it wants to boost lending and thereby stimulate economic growth as the country heads into national elections. And now it wants Indian banks to follow suit. However, the country’s commercial lenders have been slow to pass on the rate cut to consumers in the form of cheaper small business loans, home loans and car loans. As a result, the governor of the Reserve Bank of India, Shaktikanta Das, met with the CEO’s of the country banks - such as Punjab National Bank, ICICI Bank, Kotak Bank, Bank of Baroda etc - yesterday to exhort them <a href="https://www.business-standard.com/article/finance/rbi-governor-das-asks-bankers-to-pass-on-rate-cut-benefits-to-consumers-119022101292_1.html">to cut lending rates</a> for customers so as to encourage consumer confidence and investment. While the banks’ response was mostly non-committal, they said they would <a href="https://www.thehindu.com/business/will-try-to-pass-on-rate-cut-banks/article26333312.ece">try their best to cut rates</a> on home loans and personal loans. They have complained in the past of their high borrowing costs and shrinking margins - both of which are a consequence of their stock of bad loans. They also pointed to a lack of liquidity in the banking system, as consumers are hoarding cash ahead of elections. After the rate cut decision, wherein the base lending rate was cut by 25 basis points to 6.25%, the State Bank of India only cut home loan rates by <a href="https://economictimes.indiatimes.com/markets/stocks/news/sbi-cuts-interest-rate-on-home-loan-by-5-bps/articleshow/67910450.cms">a mere 5 basis points</a>. The only other bank to do the same was Bank of Maharashtra - by the same measly amount. Earlier this week, the chairman of State Bank of India, Rajnish Kumar, said that banks did not <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/headroom-to-cut-rates-does-not-exist-sbi-chairman/articleshow/68044675.cms">have the room to cut lending rates</a> because it would need to cut its deposit rates first. And it couldn’t do this unless other banks did so as well, because otherwise its customers would park their money in banks with higher deposit rates. SEE ALSO: <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">India’s central bank cuts interest rate to give growth a chance</a> <a href="https://www.businessinsider.in/rbi-pays-interim-dividend-central-government/articleshow/68057230.cms">The Modi administration’s overspending gets rewarded with an interim dividend from the central bank</a>

India’s central bank is calling on the country’s lenders to lower rates

There is more than Rs 43,000 crore of unclaimed provident fund money in India, and the government is considering using it to fund its flagship schemes like Swachh Bharat Abhiyan and Housing for All. This means that if you don’t claim your PF now, it could be used to fund government schemes in the future. 
 
As per officials, the idea was popped up by government's think tank NITI Aayog, which overlooks the key schemes of Indian government. The idea was proposed so that these projects are not delayed due to lack of funds. 
 "We are looking into the proposition of taking a loan from <keyword id="6372438" type="ORGANIZATION" weightage="100" keywordseo="EPFO">EPFO</keyword>'s unclaimed kitty to partially pump money into some of our schemes," a senior official of NITI Aayog told ET requesting anonymity. 
 
The government is yet to decide whether the money would be used in the form of a loan or bonds. The EPFO has already invested the PF amount of more than '7 lakh crore in government securities, bonds, debts and equity. 
 
"We are open to the proposal of lending money to the Centre from the unclaimed PF amount provided we earn higher rate of interest on it," said a senior labour ministry official. "We have the flexibility of parking money anywhere, but it has to backed by some security because this is workers' money which can be claimed at any time," he said. 
 
These flagship programmes require huge amounts of money so that they can be implemented and completed timely, including Rs 2 lakh crore for constructing 12 crore toilets across India by 2019 under Swachh Bharat Abhiyan and Rs 6 lakh crore to build 6 crore houses under Housing for All programme by 2022. 
 
<a href="https://letstalkpayments.com/wp-content/uploads/2014/10/Can%E2%80%8B-I%E2%80%8B-Transfer-Money-from-US-to-India-%E2%80%8Bsame-day-Inexpensively-and-Easily%E2%80%8B.jpeg">Image source</a>

If you don’t claim your PF now, it could end up in government’s kitty

Additional liquidity that is coming into the banking system following demonetisation will not go away in a "hurry" and may pull down interest rates further, the country's largest lender <keyword id="13222" type="CITY" weightage="20" keywordseo="SBI">SBI</keyword> said, as per a news report by agency. 
 "The recent government's move on demonetisation is a welcome one. A huge amount of money is coming into the savings and current accounts. This huge amount of deposits has turned the system liquidity into surplus and we believe that this extra liquidity will not go away from the system in a hurry, which may push down the interest rate further," a top SBI official told in an interview to <keyword id="6367495" type="COMPANY" weightage="20" keywordseo="PTI">PTI</keyword>. 
 
On November 8, the government surprised the nation by declaring Rs 500 and Rs 1,000 currencies invalid to check black money and fake notes, giving a 50-day window to exchange these old notes within a cap or penalty provision for unaccounted money. 
 
Thus, SBI's cash deposits have swollen by over Rs 1.27 lakh crore as on November 17 because people are compelled to put their money in bank accounts due to invalidity of these high-denomination currencies and the note exchange policy. 
 
Also, SBI expects inflation in November to slip below 4 per cent. In October, retail inflation was at 4.20 per cent while wholesale inflation eased to 3.39 per cent. 
 
"Our expectation is that the inflation in November will be below 4 per cent. Also, the recent demonetisation will support easing inflation by affecting consumer demand adversely. Hence, we are still expecting another round of repo rate cut by 25-50 basis points (0.25-0.50 per cent) in 2016-17," the official said. 
 In its last monetary policy in October, the <keyword id="50847" type="CITY" weightage="20" keywordseo="Reserve-Bank">Reserve Bank</keyword> had cut the key repo rate -- at which it lends to banks -- by 0.25 per cent to 6.25 per cent. 
 
RBI has cut repo by 1.75 per cent since January 2015. 
 State <keyword id="6355303" type="CITY" weightage="20" keywordseo="Bank-of-India">Bank of India</keyword> (SBI) trimmed its fixed deposit rates on select maturities by up to 0.15 per cent last week on account of cash flush due to invalidity of high-value notes. 
 
"Cash being deposited at SBI branches belong to customers, as such customers are at liberty to use it the way they want. Interest will be paid on the balance outstanding as per the applicable rates (SB or Term Deposit A/c)," the official said. 
 
Asked about where the bank plans to invest the surplus, SBI said these funds will be invested in reverse repo and T-Bills in the short term. 
"Subsequently, the funds will get deployed as commercial paper (CP) and for addressing credit requirements of customers depending on the availability and duration of funds," the official added. 
 
Listing the pluses of the government's move to make these notes invalid, SBI said more and more people will come to the banking channels to exchange and deposit their higher denomination notes.

Interest rates may go
down, says SBI

Mumbai (Maharashtra) [India], August 18 (ANI): <keyword id="6354335" type="General" weightage="100" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> on Friday said regulated entities (REs) have the freedom and they must offer all categories of retail loans either on a fixed or <keyword id="1104583" type="General" weightage="20" keywordseo="floating-interest-rates" source="Orion">floating interest rates</keyword> basis. At the time of sanction of EMI-based floating rate personal loans, RBI said regulated entities are required to take into account the repayment capacity of borrowers to ensure that adequate headroom or margin is available for elongation of tenor and or increase in EMI, in the scenario of a possible increase in the external benchmark rate during the tenor of the loan. In the wake of rising <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword>, RBI said it had received several grievances from consumers related to the elongation of loan tenor and or increase in EMI amount, without proper communication with and or consent of the borrowers. "In order to address these concerns, the REs are advised to put in place an appropriate policy framework meeting the following requirements for implementation and compliance," RBI said. As a part of the new rules, the central bank said: At the time of sanction, regulated entities shall clearly communicate to the borrowers about the possible impact of change in benchmark interest rate on the loan leading to changes in EMI and/or tenor or both. Subsequently, any increase in the EMI or tenor or both on account of the above shall be communicated to the borrower immediately through appropriate channels.At the time of reset of interest rates, regulated entities shall provide the option to the borrowers to switch over to a fixed rate as per their Board approved policy. The policy, inter alia, may also specify the number of times a borrower will be allowed to switch during the tenor of the loan. The borrowers shall also be given the choice to opt for enhancement in EMI or elongation of tenor or for a combination of both options; and, to prepay, either in part or in full, at any point during the tenor of the loan. All applicable charges for switching of loans from floating to fixed rate and any other service charges/ administrative costs incidental to the exercise of the above options shall be transparently disclosed in the sanction letter and also at the time of revision of such charges/ costs by the regulated entities from time to time. REs shall ensure that the elongation of tenor in case of floating rate loan does not result in negative amortisation. RBI said regulated entities shall ensure that these instructions are extended to the existing as well as new loans suitably by December 31, 2023. All existing borrowers shall be sent a communication, through appropriate channels, intimating the options available to them, RBI said. (ANI)

Banks must allow retail borrowers to switch between fixed and floating rates: RBI

The central board of trustees of the <a href="http://www.businessinsider.in/searchresult.cms?query=EPF&amp;sortorder=effectivedate">Employees' Provident Fund Organisation</a> (EPF) has reversed the decision of previous UPA-II government and will now give interest on <a href="http://www.businessinsider.in/searchresult.cms?query=inoperative+accounts&amp;sortorder=effectivedate">inoperative accounts</a> from April 1, 2016. 
 
Inoperative EPF accounts means there has been no contribution from either the employee or the <a href="http://www.businessinsider.in/searchresult.cms?query=employers&amp;sortorder=effectivedate">employer</a> for 36 months. 
 This will benefit around nine crore <keyword id="1907154" type="UNKNOWN" weightage="20" keywordseo="inoperative-accounts">inoperative accounts</keyword> of subscribers switching jobs. 
 
"We have taken a pro-worker decision to give interest on inoperative accounts with effect from April 1, 2016," said labour minister Bandaru Dattatreya. 
 
A sub-committee will be constituted for the same.

Your PF will now earn interest, even if your employer has stopped contributing to it

<keyword id="7723175" type="General" weightage="20" keywordseo="what-is-provident-fund" source="Orion">What is Provident fund</keyword>? PF or Provident Fund or as it is commonly known as, Employee Provident fund(EPF) is a government backed savings scheme which allows a salaried employee to invest a certain amount every month on which a fixed amount of interest is paid by the government. It is a retirement savings scheme and is amninistered by a statutory body, EPFO, Employee Provident Fund Organisation under the Ministry of Labor and Employment. <cmsannotation type="cmsannotation" annotationid="You can check your PF balance in four different ways." comment="subhead" text="You can check your PF balance in four different ways.">You can check your PF balance in four different ways.</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Check PF balance through EPFO Portal" comment="subhead" text="1. Check PF balance through EPFO Portal">1. Check PF balance through EPFO Portal</cmsannotation> To check your PF balance, the employer must have activated your Universal Account Number (UAN). This number is allotted by the EPF organization. Irrespective of the companies you change, this number will remain the same throughout your life. Step 1: Log on to the EPFO portal. Go to ‘Our Services’ and choose ‘for Employees’. Choose the option ‘Member Passbook’ under ‘Services’. Step 3: In the Login page, enter your UAN Number and Password after activating them. Now you can access your EPF account. <cmsannotation type="cmsannotation" annotationid="Check PF balance via SMS" comment="subhead" text="2. Check PF balance via SMS">2. Check PF balance via SMS</cmsannotation> If you have linked your UAN number with your KYC details like Aadhaar number or PAN number, you can access your PF balance via SMS. If this is done, you can send SMS message “EPFOHO UAN ENG” to the number 7738299899. This will send the details in English. Alternative SMS codes are available if you wish to know your PF balance in other languages like Hindi, Punjabi, Gujarati, Marathi, Kannada, Telugu, Tamil, Malayalam, and Bengali. 3. <cmsannotation type="cmsannotation" annotationid="Check PF balance via Missed call" comment="subhead" text="Check PF balance via Missed call">Check PF balance via Missed call</cmsannotation> If you have linked your Aadhaar card or PAN number with your PF account, you can use this method to know your PF balance. Give a missed call to 011-22901406 from your registered mobile number and you will instantly get a message stating your PF balance. 4. <cmsannotation type="cmsannotation" annotationid="Check PF balance using EPFO app" comment="subhead" text="Check PF balance using EPFO app">Check PF balance using EPFO app</cmsannotation> Download the “m-sewa app of EPFO” from Google Play Store. Open the app and click on ‘Member’ and go to ‘Balance/Passbook’. The page will ask for your UAN number and registered mobile number. If the details you give match with their records, your PF balance will be displayed. <div type="Article" hostid="261" msid="88278188" title="Here’s how you can create Universal Account Number (UAN) on the EPFO portal" mstype="2" mssubtype="0"></div>

You Searched For "PF interest rate down" and got 8 results

Finance Ministry lowers proposed PF interest rate to 8.7% for the first time

BI India Bureau

Relax! The govt won't tax you just yet for withdrawing your PF before 5 yrs

BI India Bureau

India’s central bank is calling on the country’s lenders to lower rates

Dilsher Dhillon

If you don’t claim your PF now, it could end up in government’s kitty

BI India Bureau

Interest rates may go down, says SBI

BI India Bureau

Banks must allow retail borrowers to switch between fixed and floating rates: RBI

ANI

Your PF will now earn interest, even if your employer has stopped contributing to it

BI India Bureau

How to check Pf (Provident Fund) balance in India

BI India Bureau

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