EPFO: Employees Provident Fund Organization (EPFO) has decided to maintain 8.25% interest rate on EPF for Financial Year 2024-25. This rate will remain the same as last year. Several important decisions were taken in the Central Board’s meeting, including improving insurance benefits. This will provide economic security to thousands of employees and their families. Especially, the first year of the job, after leaving the job and a gap between two jobs, will benefit the insurance cover. These changes will prove to be a big relief for the employees of the private sector.
How does interest and contribution to EPF work?
EPFO made it clear that interest of 8.25% will be deposited in the employees’ account after the approval of the Government of India. Both employees and employers (company) contribute together to the EPF account. The employee accumulates 12% of his basic salary and dearness allowance. The employer also accumulates 12%, but it divides into two parts.
8.33% of the Employees Pension Scheme (EPS).
3.67% EPF is added to the account.
What were the changes in EPFO’s Insurance Plan (EDLI)?
In the EPFO meeting, some major improvements were made in the Employees’ Deposit Linked Insurance (EDLI) scheme. The scheme was launched in 1976 so that private sector employees could get insurance security. Now millions of employees will benefit from new changes.
1. Insurance cover on death in the first year of job
Earlier, if an employee died before a year’s job, his family did not get the benefit of insurance. Now if an employee dies during a job of less than a year, the family will get an insurance cover of at least Rs 50,000. This will help more than 5,000 families every year.
2. Insurance cover will be available for 6 months after leaving the job
Earlier, if an employee died 6 months after leaving his job, he did not get the benefit of insurance. Now if the employee dies within 6 months of the final salary and his name is still in the company’s record, then he will get the benefit of insurance. This change will benefit around 14,000 families every year.
3. Insurance will be available even if there is a gap between two jobs
Previously, if an employee left a job and there was a gap of 1-2 days to join a second job, then there was no benefit of insurance. Now if there is a gap of up to 2 months between two jobs, the employee will still get an insurance cover. This will benefit families of about 1,000 employees every year.
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