EPF interest rate increased from 8.7% to 8.8%

In the third roll-back in two months, the government on Friday raised interest rate on employee provident fund (EPF) contributions to 8.8% for 2015-16 against 8.7% approved by the Finance Ministry last week.

Labour Minister Bandaru Dattatreya announced the decision to raise interest rate on a day employee unions had called nationwide protests against fixing interest rates lower than 8.8 % decided by the retirement fund body EPFO as well as 8.75 % paid for the previous fiscal.

"I am happy that finance ministry has agreed to 8.8 % for 2015-16," he told reporters.

This is the third rollback on EPF. Last month the government was forced to withdraw the Budget proposal to tax a certain portion of withdrawals. Subsequently, it withdrew tighter withdrawal norms.