EPFO okays 8.25 per cent interest rate on PF deposits for 2025-26

New Delhi, March 2 (IANS) The Employees’ Provident Fund Organisation (EPFO) on Monday approved an interest rate of 8.25 per cent on employees’ provident fund (EPF) deposits for 2025-26, retaining the same rate for the second year in a row, according to an official statement. 

The decision was taken at the 239th meeting of the Central Board of Trustees in the national capital, chaired by Union Labour and Employment Minister Mansukh Mandaviya. The meeting was attended by Minister of State Shobha Karandlaje, Secretary, Labour & Employment, Vandana Gurnani, and EPFO Chief Ramesh Krishnamurthi.

Following the CBT’s decision, the proposed interest rate will be sent to the Ministry of Finance for approval. After it is formally ratified, the new rate will be credited to the accounts of over seven crore EPFO subscribers.

The interest on EPF deposits is calculated monthly but credited to the accounts of subscribers at the end of the financial year.

However, accounts that remain inactive for 36 months do not earn any further interest as they are considered dormant.

Despite global uncertainties, the EPFO has maintained strong financial discipline, ensuring stable and competitive returns without straining the interest account. The decision benefits crores of workers by strengthening their retirement security, while reaffirming the EPFO’s commitment to safeguarding contributions and delivering prudent, sustainable, and attractive returns compared to other similar investment avenues, the statement said.

The EPFO has been able to declare an interest rate of above 8 per cent for the past several years owing to the good returns given by ETF and other investments. The decision reflects the strong credit profile of the EPFO’s investment portfolio and its sustained ability to deliver competitive returns to its members, the statement explained.

Further, continuing the reforms in the EPFO, the Board approved a one-time Amnesty Scheme to address compliance issues arising from income tax–recognized trusts that are yet to be covered or granted exemption under the EPF & MP Act, 1952, duly taking into account the provisions of the Finance Act, 2026. The proposed scheme seeks to bring establishments and trusts into compliance within a defined six-month period, primarily to protect workers’ interests while waiving damages, interest and penalties for those that have already provided benefits equal to or better than the statutory scheme. It allows retrospective relaxation or exemption subject to specified conditions and ensures that all eligible employees receive statutory benefits.

The measure is expected to resolve over 100 active litigation cases, along with several others, thereby benefiting thousands of trust members. The scheme shall apply to those exempted establishments which have complied with the provisions of the EPF & MP Act, 1952.

The Board also approved the new simplified SOP on EPF Exemption, consolidating the existing four SOPs and the Exemption Manual into a single comprehensive framework, which aims to reduce compliance burden. The SOP also provides an end-to-end digital process for the surrender and transfer of past accumulations. This technology-driven governance approach will make the audit of exempted establishments more transparent and efficient. A unified framework will promote ease of doing business.

Besides, the CBT has approved the notification of new social security schemes to align with the Code on Social Security, 2020, to ensure seamless transition from the existing framework. The newly approved Employees’ Provident Fund Scheme, 2026, Employees’ Pension Scheme, 2026 and Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026 will replace the current schemes and provide a legally robust foundation for administering provident fund, pension and insurance benefits.

--IANS

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