The EPF rate for 2021-22 was declared at 8.1%, the lowest level since 1977-78, in March 2022 and was approved by the Ministry of Finance in June. File | Photo credit: The Hindu
Almost two years after the 2021-22 budget introduced a tax on annual contributions to the Employees Provident Fund (EPF) of more than ₹2.5 lakh, implementation challenges continue to affect thousands of EPF members whose interest due for this year has still not been credited to their accounts.
The EPF rate for 2021-22 was declared at 8.1%, the lowest level since 1977-78, in March 2022 and was approved by the Ministry of Finance in June. In October 2022, Finance Minister Nirmala Sitharaman attributed the delay in EPF interest credits to a software upgrade and assured that the credits would soon be visible.
Since then, the Employees Provident Fund Organization (EPFO) has divided the EPF booklets for 2021-22 into taxable and non-taxable contributions, but the interest credit is still to be granted to many EPF account holders.
“The annual accounts for the year 2021-22 have not yet been processed by the technical team of EPFO HO [Head Office]Raghuttam Pai, an employee of a Mumbai-based fintech company, was told by the pension body’s grievance team last Friday in response to questions about the missing interest.
“For a brief period the EPFO website as well as the app was down for an upgrade and I thought after that there would be interest,” Mr Pai said. The Hindu. “It’s amazing we haven’t gotten last year’s interest yet as this exercise draws to a close. Citizens are held to pay criminal charges when tax returns or PF contributions are delayed, but no one is held accountable when the government delays our contributions,” he lamented.
“I understand that the EPF booklets for 2021-22 now reflect taxable and non-taxable employee contributions in separate columns, so there have been some changes to the software. But obviously the final interest credit for 2021-22 is still facing a challenge leading to delays,” said Saraswathi Kasturangan, Partner at Deloitte India. The Hindu.
No response to queries
Detailed questions on the issue sent to PF central commissioner Neelam Shami Rao on Monday did not elicit a response before press time.
The members of the Central Board of Trustees (CBT) which oversees EPFO are not amused. “Interest was declared several months ago and we are almost at the end of the next fiscal year. I urge EPFO officials to ensure that every member receives their interest credited immediately, even if it means working overtime. Treat it as if it were your own outstanding,” said CBT member KE Raghunathan.
Michael Dias, a board member, called the delay in interest credit a “serious problem” that clearly reflects EPFO’s inefficiency.
“A miniscule number of ETH accounts involve contributions of more than ₹2.5 lakh per annum and even if you had to split those contributions into two accounts, calculating and crediting interest shouldn’t take that long these days with all records online. EPFO has a large budget for technical upgrading and needs to kick up its boots to correct the situation,” he said.
The EPFO board, chaired by Labor and Employment Minister Bhupendra Yadav, is expected to meet by March to finalize the EPF rate to be paid to members for 2022-23.
Board members will likely point to this unprecedented delay and pointed out that EPF interest for 2020-21 was credited to members’ accounts in December 2021. Ms Kastirirangan noted that for members wishing to withdraw their EPF savings, the balances are paid. with an “up-to-date” interest credit.