The government has made many announcements and promises for the middle class in Budget 2025. The most important among these is to make annual income up to Rs 12 lakh tax free. Now the government can soon give another gift to the employed middle class, which will be in the form of an increase in the interest rate of Provident Fund (PF).
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The decision will be taken in the board meeting of EPFO.
The meeting of the Central Board of Trustees of the Employees’ Provident Fund Organization (EPFO) is scheduled to be held on 28 February. In this, there may be a discussion on increasing the interest rate on PF for 2024-25. This meeting will be chaired by the Union Labor Minister. Representatives of employer associations and trade unions will also participate in it. However, the official agenda of the meeting has not been released yet.
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Why can the interest rate of PF increase?
The entire focus of the government is currently on reviving the economy, for which it is necessary to increase demand and consumption. This is the reason why the government is giving relief to the middle class through a series of measures. After increasing the limit of income tax exemption, now the government can consider increasing the interest rate of PF. This will earn more on PF savings of middle-class employees, so they can increase other expenses.
How much is the interest on PF now?
The government has been increasing the interest rate continuously for two years. In such a situation, PF account holders are hopeful that the interest rates may increase this time too. The government had increased the interest rate of PF to 8.15 percent in 2022-23. Then it was increased to 8.25 percent in 2023-24. Since then, the same interest rate is being given on PF, which the government can now consider increasing.
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How much can EPFO increase interest?
Given the current base rate of banks, there is no scope for much increase in PF interest rates. In such a situation, the government can increase it by 0.10 percent like last time. EPFO has accounts of more than seven crore people in the country. New members are constantly joining it. The number of people depositing money in EPFO’s pension fund is also continuously increasing.
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