LABOUR secretary PC Chaturvedi said that government will strive work towards higher EPF rate to 4.2 crore provident fund contributors for 2011-12 in the face of hardening interest rates in the country.
The central board of trustees would meet in October to take a call on EPF rate, which had been fixed at 9.5 per cent for 2010-11.
"With higher interest rate offered by banks we will try to work towards better rate of return to PF contributors. In the past we have had EPF rate as high 12 per cent and there is no reason to believe why should it not go up again as our effort would be to maximise yeild on PF investments," he said.
Asked if it could go up to 12 per cent, "Why not...We are planning to appoint more efficient fund managers to get better yield to enable us provide higher EPF rate to PF contributors," he said.
The EPF rate, which was as high as 12 per cent from 1989 to 2000, began falling with softening of interest rates and came down to 8.5 per cent before hiking to 9.5 per cent for 201011 after a spat with finance minister over the issue of availability funds to pay the increased rate. On the issue of income tax department slapping Rs 8,000 crore tax demand on PF withdrawals before five years, Chaturvedi said it was not for EPFO to clear the tax dues and the matter should be addressed to employers.
"IT department has asked the labour ministry to clear provident fund claims only after deducting the tax. We have said there was a difference of opinion between EPFO and income tax department on this issue as if there was any tax due from PF beneficiaries it was for the employers to deduct it," Chaturvedi said.
