The EPFO announced a cut in interest rates this month, which was a big blow to the investors. After the announcement, now the interest rate has been reduced by EPFO to 8.1% for the financial year 2021-22. Earlier it was 8.5%. But there are many such things related to EPFO which we do not know. Because of which many times investors have to suffer losses. Let us know what those things are –
Before April 1, 2021, the interest earned on EPF was completely tax free. But after that many classes have been fixed. On which investors have to pay tax. According to the new rules, annual investment up to Rs 2.50 lakh will be tax free. Expert Balwant Jain says that interest will have to be paid on more than Rs 2.50 lakh. If no contribution is made by the employer, the limit will be Rs 5 lakh. Let us tell you, 93% of the investors of EPFO come within this limit.
Also read: Big update for LIC policy holders, hurry up or else the opportunity will be out of hand; last date is near
Who invests how much?
Here 12% is invested by the employer and 12% is invested by the employee. 8.33% of the employer’s investment is transferred to the Employees’ Pension Scheme. Also, no interest is earned on it. Because it would have been part of a process that required the contribution of the investor and the employer. This is the reason why this scheme proves to be very beneficial in the long run.