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New Delhi, Mar 4 () Retirement fund body <keyword id="6372438" type="COMPANY" weightage="20" keywordseo="epfo">EPFO</keyword> on Thursday decided to retain 8.5 per cent rate of interest on provident fund deposits for the current financial year. EPFO has more than five crore active subscribers. The Employees' Provident Fund Organisation's (EPFO) apex decision-making body <keyword id="225704" type="COMPANY" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> decided to fix 8.5 per cent rate of interest for 2020-21 at its meeting in Srinagar on Thursday, sources said. There were speculations that the EPFO would lower interest on provident fund deposits for this fiscal (2020-21) from 8.5 per cent given in 2019-20 in view of more withdrawals and lesser contribution by members amid the coronavirus pandemic. In March last year, the EPFO had lowered interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent in 2018-19. The <keyword id="45027" type="COMPANY" weightage="20" keywordseo="EPF">EPF</keyword> (<keyword id="114591" type="COMPANY" weightage="20" keywordseo="Employees-Provident-Fund">Employees Provident Fund</keyword>) interest rate provided for 2019-20 was the lowest since 2012-13, when it was 8.5 per cent. The EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. The EPFO had provided 8.25 per cent rate of interest on provident fund in 2011-12. KKS RAM

EPFO retains 8.5% interest rate for 2020-21

As investment instruments, <keyword id="76579" type="CITY" weightage="20" keywordseo="PPF">PPF</keyword> (Public Provident Fund) and <keyword id="45027" type="ORGANIZATION" weightage="20" keywordseo="EPF">EPF</keyword> (Employees' Provident Fund) have a lot of things uncommon between them. Basically speaking, the decision to invest in a PPF scheme rests with the investors while EPF is automatically deducted from the salary of the salaried class of people. Both these investment options enable the investors cave on taxes. Section 80 C of the Income Tax Act of 1961 makes both <keyword id="8113458" type="UNKNOWN" weightage="20" keywordseo="PPF-and-EPF">PPF and EPF</keyword> investments eligible for a range of income tax benefits. Overview of EPF and PPF In India, two types of provident funds are popularly known namely Employees’ Provident Fund or EPF and Public Provident Fund or PPF. Under the existing regulations, EPF is automatically deducted from the salary of the salaried class individuals by their employees and paid into their respective EPF accounts maintained with the EPF department under the auspices of the Government of India. The choice to invest in a PPF scheme solely rests with the investor. This means that if you are a salaried individual, you do not have a choice not to subscribe to the EPF scheme. Hence, the deductions will be invariably made from your salary to be invested into your EPF account. But, whether you wish to invest in a PPF scheme is purely optional. EPFO or Employees Provident Fund Organization is a retirement fund body that governs the EPF scheme. PPF scheme is offered by the Government of India through banks and post offices. How do these schemes compare Interest rates The government decides the interest rate of PPF year on year depending on several factors related to the country’s economy. Over the past several years, the interest rate of EPF contributions had never come down below 8.5 percent. The government decides the interest rates of PPF during every quarter. For the quarter ending in June 2018, the interest rate for PPF investments was fixed at 7.6% for example. Since the PPF investments come under the Exempt, Exempt, Exempt category, the returns are completely exempt from taxes. The principal amount, the maturity amount and the benefits earned on the investment are all qualified for tax exemption. How the EPF and PPF schemes operate If an individual works with a company that has more than 20 people on its rolls, EPF deduction is compulsory. The salaried employee contributes about 12 percent from their monthly salary towards EPF. The employer has to contribute an equal share of 12 percent which will be deposited in the employee’s account along with the employee’s contribution. Any citizen who is a resident of India can open a PPF account. To open a PPF account it is not necessary that the individual must be a salaried person. Members of Hindu Undivided Families (HUF) cannot open a PPF account. The tenure of investment in case of a PPF account is 15 years. Once this period expires, the investment can be extended for another 5 years. From the third financial year of opening the account, the investor can take a loan from the PPF account. From the seventh financial year, the investor can make partial withdrawals from this account.

What is the difference between PPF and EPF

(Eds: Adding details) New Delhi, Mar 5 () Retirement fund body EPFO on Thursday lowered interest rate on provident fund deposits to a seven-year low of 8.5 per cent for the current financial year. The the Employees' Provident Fund Organisation (EPFO) had provided 8.65 per cent rate of interest on EPF for 2018-19 to its around six crore subscribers. The decision was taken at a meeting of the the EPFO's apex decision making body -- the Central Board of Trustee (CBT). "The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the CBT meeting today," Labour Minister Santosh Gangwar said here after the meeting. The minister also said that the EPFO will have a surplus of over Rs 700 crore on providing 8.5 per cent rate of interest on EPF for this fiscal. A ministry source said, "The EPFO would have left with a surplus of over Rs 300 crore if it had provided 8.55 per cent rate of interest on EPF for this fiscal. There would have been a deficit if the EPFO had provided a rate of more than 8.55 per cent for current fiscal." The EPF interest rate announced for the current fiscal is lowest since 2012-13, when it was 8.5 per cent. The EPFO had provided 8.65 per cent interest rate to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. Now, the labour ministry requires the finance ministry's concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. KKS MKJ

EPFO cuts interest rate on deposits to 7-year low of 8.5 pc for 2019-20

New Delhi, Mar 1 () The labour ministry is keen to retain an interest rate of 8.65 per cent paid on provident fund deposits to around six crore subscribers of retirement fund body EPFO for the current financial year, a source said. The apex decision making body of Employees' Provident Fund Organisation (EPFO) -- Central Board of Trustees -- is likely to consider the rate of interest on EPF (Employees' Provident Fund) deposits in its meeting scheduled on March 5, 2020. "The proposal to provide interest rate on EPF deposits for 2019-20 may come up for consideration and approval in the Central Board of Trustees (CBT) meeting on March 5," a source said. The source further said that the ministry is keen to retain the interest rate at 8.65 per cent, as was provided in financial year 2018-19. Speculations are rife that the interest rate on EPF may be lowered to 8.5 per cent for the current fiscal, a tad lower than 8.65 per cent provided for 2018-19. According to the source, the agenda for the CBT meeting has not yet been finalised and it is difficult to predict EPFO's income projections for the current fiscal, which will be the basis for fixing the interest rate. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. The labour ministry requires the finance ministry's concurrence to provide a rate of interest on EPF deposits in a fiscal year. Since the Government of India is the guarantor, finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had provided 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. KKS DRR

Labour ministry keen to retain 8.65 pc interest rate on EPF deposits for 2019-20

New Delhi, Mar 5 () Retirement fund body EPFO on Thursday lowered interest rate on provident fund deposits to 8.5 per cent for the current financial year, said Labour Minister Santosh Gangwar on Thursday. The EPFO had provided 8.65 per cent rate of interest on EPF for 2018-19 to its around six crore subscribers. The decision was taken at a meeting of the the Employees' Provident Fund Organisation's (EPFO) apex decision making body -- the Central Board of Trustee. "The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the Central Board of Trustees (CBT) meeting today," Gangwar told reporters after the meeting here. Now, the labour ministry requires the finance ministry's concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. KKS MKJ

EPFO cuts interest rate on deposits to 8.5 pc for 2019-20

New Delhi, Retirement fund body EPFO on Thursday started crediting 8.5% rate of interest on employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">provident fund</keyword> (EPF) for 2019-20 for its over six crore members, a senior official said. A large number of members of the <keyword id="6423266" type="COMPANY" weightage="20" keywordseo="employees-provident-fund-organisation">Employees Provident Fund Organisation</keyword> (EPFO) would be able to see their updated EPF accounts with credit of 8.5 per cent rate of interest for 2019-20, a senior official told . The official further informed that the <keyword id="126926" type="COMPANY" weightage="20" keywordseo="Labour-Ministry">labour ministry</keyword> has already sent the direction to credit the 8.5% interest on EPF for 2019-20 to the EPFO and the body has already started crediting interest into members account for the last fiscal. Labour Minster <keyword id="258830" type="PERSON" weightage="20" keywordseo="Santosh-Gangwar">Santosh Gangwar</keyword> said, "We had said that it would be our endeavour to provide 8.5% rate of interest on EPF for 2019-20. We have issued a notification to provide 8.5% rate of interest on EPF for 2019-20. We have also began the process to credit the said rate of interest into subscribers account." The minister also said that he has asked to ensure that all those members who are retiring on December 31, must get 8.5% rate of interest (for 2019-20). The process for capital gains for payment of 0.35% interest for 2019-20 has also been completed, he added. "It (8.5% interest) would comprise 8.15% from debt income and balance 0.35% (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020," he said. Earlier in the day, Gangwar had approved the 8.5% rate for last fiscal after receiving the finance ministry's concurrence. Thereafter the direction was sent to the EPFO for crediting the interest on EPF into the subscribers' accounts. In March this year, the EPFO's apex decision making body <keyword id="225704" type="COMPANY" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> headed by Gangwar had approved 8.5% interest rate on EPF for 2019-20. Earlier in September this year, the EPFO had decided to split 8.5% interest into two installments of 8.15% and 0.35% in its trustees meet headed by Gangwar. But later, the ministry decided to credit the entire 8.5% into subscribers' accounts in one go. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-tata-steel-vedanta-adani-green-tata-motors-maruti-mm-dhfl-v-mart-indian-bank-and-others/articleshow/80038635.cms">Top stocks to watch — Tata Steel, Vedanta, Adani Green, Tata Motors, Maruti, M&amp;M, DHFL, V-Mart, Indian Bank, and others</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-the-list-of-upcoming-new-mobiles-in-january-2021-with-expected-price/articleshow/80039794.cms">Upcoming smartphones in India in January 2021</a> <a href="https://www.businessinsider.in/international/news/ten-of-the-most-outrageous-predictions-for-2021-according-to-saxo-bank/slidelist/80040045.cms">From Amazon buying Cyprus to Germany bailing out France — here are ten of the most ‘outrageous’ predictions for 2021</a>

EPFO begins crediting 8.5% interest for six crore people — to reflect in EPF accounts from new year

<ul><li><keyword id="2071614" type="PERSON" weightage="20" keywordseo="Job-creation-in-India">Job creation in India</keyword> fell by 6.91% in January to 1.12 million, according to Employee State Insurance Corporation (ESIC) payroll data. </li><li>Indian Economy was able to create 1.20 million job same time last year. </li><li>The ESIC scheme attracted nearly 20.8 million new subscribers from September 2017 to January 2019.</li></ul>While <a href="https://www.businessinsider.in/indias-unemployment-rate-for-february-highest-in-two-years-cmie/articleshow/68280848.cms">unemployment in India stood at 7.2%</a> in February this year, the number of jobs created in the country also fell by 6.91% in January. The number decreased to 1.12 million from 1.20 million during the same time last year, according to the numbers put out by Employees State Insurance Corporation (ESIC). The ESIC scheme includes health and medical benefits for organisations that have an employee base of more than 20 and to employees with monthly pay upto ₹21,000. At the time of joining, the workers with basic monthly pay up to 15,000 are included under the ESIC scheme. According to ESIC scheme data, which provides health insurance and medical services, added nearly <a href="https://www.moneycontrol.com/news/business/economy/job-creation-dips-6-9-in-jan-to-11-23-lakh-esic-payroll-data-3698601.html">20.8 million new subscribers</a> from September 2017 to January 2019. The payroll data, floated by the Central Statistics Office, is based on the working professionals joining social security schemes under Employees Provident Fund Organisation (EPFO) and Pension Fund Regulatory Development Authority (PFRDA). Nearly 7.64 million subscribers were reportedly added to the scheme. From last year onwards, the CSO has been rolling out statistics on jobs and employment covering the data from September 2017. The report is based on the number of subscribers under the three schemes — Employees' Provident Fund (EPF) Scheme, Employees' State Insurance (ESI) Scheme and National Pension Scheme (NPS). However, the creation of jobs in the formal sector projected to a 17-month high at 896,000 in January 2019, the report highlighted. With elections just around the corner, the numbers on employment and jobs has been affecting the country’s youth largely. According to a recent <a href="https://www.businessinsider.in/indias-unemployment-rate-stands-at-13-2-among-graduates-and-post-graduates-cmie/articleshow/68517075.cms">analysis</a> by the Centre for Monitoring Indian Economy (CMIE), the unemployment rate hits the highest for the highly educated segment — bachelor’s degree and above — at 13.2%. See also: <a href="https://www.businessinsider.in/indias-unemployment-rate-for-february-highest-in-two-years-cmie/articleshow/68280848.cms">India's unemployment rate for February highest in two years: CMIE</a> <a href="https://www.businessinsider.in/indias-unemployment-rate-stands-at-13-2-among-graduates-and-post-graduates-cmie/articleshow/68517075.cms">Fewer jobs for better educated: India’s unemployment rate stands at 13.2% among the highly educated segment</a> <a href="https://www.businessinsider.in/male-workforce-is-reportedly-shrinking-in-india-reveals-job-survey-by-nsso/articleshow/68498030.cms">Male workforce is reportedly shrinking in India, reveals job survey by NSSO</a>

Job creation in India slows down by 6.9% in January: ESIC payroll data

The <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2017&amp;sortorder=effectivedate">Budget for 2017</a> is riding on a lot of expectation in the aftermath of <a href="http://www.businessinsider.in/searchresult.cms?query=demonetisation&amp;sortorder=effectivedate">demonetisation</a>. It’s almost as if people are hoping the government to now make good for the hardship and the pain they endured. Some key states are due for elections in the coming months. And this seems to be the perfect backdrop to make it a dream budget for households and businesses. 
 
Lower tax burden - Since the beginning of time, governments have faced pressure to cut <a href="http://www.businessinsider.in/searchresult.cms?query=taxes&amp;sortorder=effectivedate">taxes</a> on income. This pressure is now rising from the working class, who are asking for higher exemption limit in the wake of <keyword id="3315394" type="UNKNOWN" weightage="20" keywordseo="demonetisation">demonetisation</keyword>. Rs 2.5lakhs is the existing exemption limit. Income disclosure scheme (IDS) has helped the government add around Rs 30,000 crores to its kitty. But the real test of these schemes lie in their ability to bring more people in to the tax net, leading to wider compliance and tax filing. Every increase in the minimum taxable limit or lowering of tax rates, means fall in revenue for the government. The government needs to find that sweet spot where it can balance this loss without severely impacting its fiscal deficit. With Niti Aayog recommending tax slab expansion, a revision may be in the offing. 
 
Popularising NPS – NPS is a credible alternative to EPF for those who prefer equity linked investing to build a corpus for their retirement. It may be hard to sustain high returns on EPF, and therefore the government can focus on offering people an alternative in the form of NPS. The government has made efforts to ease entry to NPS by making it aadhaar linked, more clarity on taxes on its withdrawals are required. NPS is structured in the form of TIER1 and TIER2 accounts. While investments in TIER 1 are eligible for tax benefits. TIER2 is a voluntary investment account. Withdrawals are allowed from TIER 1 post retirement. Investors can withdraw from TIER 2 at any time. However, PFRDA must put together details on tax on withdrawals from TIER 2. Investments to TIER1 may be limited due to tax benefit being Rs 50,000 in a financial year, once there is clarity about TIER2, investors can enjoy the flexibility that comes with TIER2 accounts, as well as stay committed to investing for their retirement. 
 
Use of India Stack – The use of India Stack for Identity (Aadhaar) and payments (UPI) is set to fuel innovation in the fintech sector. Investing through machine learning and AI will have the capacity to reach millions of taxpayers and bring them on board easily and with low cost means. Customers who want buy mutual funds, borrow loans, will be authenticated seamlessly via the aadhaar framework without having to go through paperwork or lengthy approvals. Those have suffered financial exclusion will now be brought online quickly. The government has an important role to play in this journey, It can offer incentives that encourage entrepreneurship in this sector and offer faster regulatory approvals. 
 
Roll out GST – 2017 will turn out to be a historic year for indirect taxes due to launch of GST. This presents immense opportunity for businesses to adopt technology as a means to achieve their objectives. Adoption of GST would lead to wider compliance and replace physical C-forms, VAT forms, state tax approvals and tax payments with electronic and digital forms and payments. We hope the government will stay on course with GST, allowing only very necessary exemptions and offering incentives to small businesses to adopt technology. 
 
Reform tax laws – The finance minister must make use of comfortable majority in the house to bring in simplification of tax laws. Some of the deductions are not relevant in today’s times. For example, children’s education allowance which stands at Rs 100 per month for maximum two children or hostel allowance which is exempt up to Rs 300 per month for maximum two children. Medical reimbursement that stands at Rs 15,000 is meagre in today’s times. Direct tax code may be considered for review once GST has been put in place. 
 <keyword id="6599769" type="UNKNOWN" weightage="20" keywordseo="Budget-2017">Budget 2017</keyword> is will be both historic and promising for India. 
 
 (This article is authored by Archit Gupta, Founder &amp; CEO ClearTax.com)

Expectations from Budget 2017 have increased post demonetisation. Here’s what the tax experts wish for

New Delhi, Feb 3 () The Budget prescribing a Rs 7.5 lakh per annum cumulative upper ceiling for tax-free contribution by employers under employee provident fund (EPF), National Pension System (NPS) and superannuation fund will impact only those with an annual salary of more than Rs 60 lakh, Revenue Secretary Ajay Bhushan Pandey said Monday.
 The proposal is not something unique to India as similar ones are followed in other countries as well, he said.
 Pandey further said taxing dividend income at the hands of the receiver is "most fair" rather than charging a dividend distribution tax (DDT) on the companies paying dividend because the rate of tax levied is then decided on the basis of the total income of the recipient.
 Speaking about the Budget provision that proposed a combined upper limit on tax-free employers' contribution towards the NPS, superannuation fund and provident fund at Rs 7.5 lakh annually for an employee, Pandey said if there is no limit, it will allow structuring of the salary into various components to lower the tax outgo.
 "If you consider the Rs 7.5 lakh (threshold), it will affect only those with an annual salary of more than Rs 60 lakh," Pandey said at a post-Budget interaction organised by Ficci.
 "Having no limit also allows structuring of the salary into various components where this particular thing could be hiked up and then actual tax could be very less. This threshold is not something very very unusual we have done. It is being developed in many parts of the world," he added.
 Under the existing provisions, the contribution by the employer to a recognised provident fund exceeding 12 per cent of salary is taxable.
 The Budget 2020-21 also proposed to withdraw DDT saying that henceforth, the tax will have to be paid by the recipients at the applicable rate.
 Currently, companies are required to pay dividend distribution tax (DDT) on the dividend paid to its shareholders at the rate of 15 per cent plus applicable surcharge and cess, in addition to the tax payable by the company on its profits. The total rate works out to be 20.5 per cent.
 Pandey said there has been a demand from every section of industry that DDT is "very very regressive" on many counts particularly for retail investors falling in lower tax slab and, hence, the government has accepted in principle that it should be taxed at the hands of investors at applicable rate.
 Also, foreign investors were unable to claim credit in their home country because DDT did not exactly qualify as an income tax.
 "We did a study on how dividends are taxed in various parts of the world. In many jurisdictions, it is taxed at the applicable rate and that seems to be most fair. The best option available is that it should be charged at the applicable rate and that should be (calculated as) part of income because every income is taxed at applicable rate and then nobody will have grudge," Pandey said.
 The DDT has been in place for more than 20 years. In 2002, it was abolished but in 2003, it was brought in again. JD DP HRS

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EPFO retains 8.5% interest rate for 2020-21

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What is the difference between PPF and EPF

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EPFO cuts interest rate on deposits to 7-year low of 8.5 pc for 2019-20

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Labour ministry keen to retain 8.65 pc interest rate on EPF deposits for 2019-20

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EPFO cuts interest rate on deposits to 8.5 pc for 2019-20

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EPFO begins crediting 8.5% interest for six crore people — to reflect in EPF accounts from new year

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Job creation in India slows down by 6.9% in January: ESIC payroll data

BI India Bureau

Expectations from Budget 2017 have increased post demonetisation. Here’s what the tax experts wish for

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Limit on tax-free employer contribution to retirement funds to impact those with salary above Rs 60 lakh

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