Another good news for EPFO Members. To give a lift to the slow-moving Indian economy, the Government of India has been rolling out a bunch of benefits for the middle class, both during and after the budget announcement. There have been a series of promises and declarations aimed at boosting market demand by putting more cash in people’s hands and encouraging spending, which should help the market pick up speed.
So, along with the announcement of tax-free income up to Rs. 12.75 lakh in the budget, the Government of India might also reveal an increase in the interest rate on PF deposits. This could happen during the Central Board of Trustees meeting for EPFO on February 28, which will be led by the Union Labor Minister, with representatives from Employer Associations and Trade Unions also in attendance.
That’s why it looks like the interest rate might go up.
Right now, the Indian government is really focused on ramping up market demand and is taking various steps to achieve this. After making income up to Rs. 12 lakh tax-free, it’s crucial for the government to show that people can earn more from other sources, encouraging them to spend more domestically. So, there’s a chance that the PF interest rate could be raised for 2024-25.
The Government of India has done this in the past two years. In 2022-23, the PF interest rate was bumped up to 8.15 percent, and then to 8.25 percent in 2023-24. Given the current bank base rates, it seems likely that the PF interest rates could see a slight increase.
EPFO boasts over 70 million account holders. As per the annual report for 2023-24, the total stands at 73.7 million. Additionally, the number of individuals contributing to the EPFO pension fund has approached approximately 800,000.