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Home / News / India News / Government approves 8.7% EPF for 2015-16
  • India

    Government approves 8.7% EPF for 2015-16

    Written by
    Prachi
    Edited by
    Gaurav Jeyaraman
    Last updated on Apr 25, 2016, 05:11 pm
    Government approves 8.7% EPF for 2015-16
    Credits:
  • The Finance Ministry has ratified 8.7 per cent interest on PF deposits for almost 5 crore subscribers of the Employees Provident Fund organisation (EPFO).

    This rate is however, lower than the 8.8 per cent decided by EPFO'S apex body-the Central Board of Trustees (CBT).

    The interest rate was also reduced for Kisan Vikas Patra (KVP), Five-Year National Savings Certificates and Samridhi Yojana.

  • In this article
    What is the Employee Provident Fund? Taxation on Employee Provident Fund proposed in Budget 2016 Confusion over new taxation rules for EPF, NPS No tax on PPF, tax on only EPF interests Government to bring all pension schemes at par Budget 2016's focus on financial security for the elderly Govt to defer EPF taxation Finance Min withdraws EPF tax proposal Government approves 8.7% EPF for 2015-16
  • Introduction

    What is the Employee Provident Fund?

    What is the Employee Provident Fund?
  • Employee Provident Fund (EPF) is a retirement benefit applicable only to salaried employees.

    It is a fund to which both the employee and employer contribute 12% of the former's basic salary amount each month, a percentage that is pre-set by the government.

    Until now, there was no tax on investment, on interest accrued and on withdrawal of EPF.

  • 29 Feb 2016

    Taxation on Employee Provident Fund proposed in Budget 2016

    Taxation on Employee Provident Fund proposed in Budget 2016
    Credits:
  • Finance Minister Arun Jaitley proposed to impose a tax on 60 percent of Employee Provident Fund (EPF) corpus as part of the Budget 2016.

    National Pension Scheme (NPS) withdrawals on retirement were proposed to be made partially taxable as well.

    The basis of the government's decision was to bring all retirement schemes at par with each other.

  • 29 Feb 2016

    Confusion over new taxation rules for EPF, NPS

    Confusion over new taxation rules for EPF, NPS
  • A huge outcry broke over whether the entire 60% of the EPF corpus was going to be taxed or only the interest component.

    Previously, the National Pension Scheme (NPS) had been taxable upon withdrawal and the new tax rule has been introduced to make the NPS more attractive.

    However, the tax rules for NPS were also not clear under the new guidelines.

  • 2 Mar 2016

    No tax on PPF, tax on only EPF interests

    No tax on PPF, tax on only EPF interests
    Credits:
  • The government announced that the Public Provident Fund (PPF) scheme would remain exempted from taxes, clarifying doubts over vague references made in the Budget to introduce taxes for Provident Funds.

    Further, 60 percent of contribution made to Employee Provident fund after April 1, 2016 would be taxed.

    Small salaried employees with up to Rs.15,000/month income would be exempted from the proposed taxation.

  • Analysis

    Government to bring all pension schemes at par

    Government to bring all pension schemes at par
  • While EPF contributions had been exempt from all taxes, withdrawals under the National Pension Scheme (NPS) had always been taxable.

    Experts believe that the differential tax structure has impaired the growth potential of the NPS scheme.

    The move to make all EPF schemes taxable was aimed at bringing the NPS and the EPF schemes at par with each other.

  • Information

    Budget 2016's focus on financial security for the elderly

  • ''Pension schemes offer financial protection to senior citizens. I believe that the tax treatment should be uniform for defined contribution pension plans."- Financial Minister, Arun Jaitley

  • 6 Mar 2016

    Govt to defer EPF taxation

    Govt to defer EPF taxation
    Credits:
  • To shield his government from criticism, Prime Minister Narendra Modi suggested that Finance Minister Arun Jaitley defer the proposed tax on Employees' Provident Fund (EPF).

    The PMO asked the Finance Ministry to undertake a detailed examination of the proposed tax.

    The Prime Minister's intervention will bring relief to nearly 60 lakh EPF subscribers who earn more than Rs.15,000 per month.

  • 8 Mar 2016

    Finance Min withdraws EPF tax proposal

    Finance Min withdraws EPF tax proposal
    Credits:
  • Finance Minister Arun Jaitley withdrew his Budget proposal to tax employees' provident fund (EPF) at withdrawal.

    "In view of representations received, the government would like to do a comprehensive review of this proposal and therefore I withdraw the proposal," Jaitley said in Lok Sabha.

    However, he stated that the 40% exemption given to National Pension Scheme subscribers at the time of withdrawal will remain.

  • 25 Apr 2016

    Government approves 8.7% EPF for 2015-16

    Government approves 8.7% EPF for 2015-16
    Credits:
  • The Finance Ministry has ratified 8.7 per cent interest on PF deposits for almost 5 crore subscribers of the Employees Provident Fund organisation (EPFO).

    This rate is however, lower than the 8.8 per cent decided by EPFO'S apex body-the Central Board of Trustees (CBT).

    The interest rate was also reduced for Kisan Vikas Patra (KVP), Five-Year National Savings Certificates and Samridhi Yojana.

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