EPFO interest rate (AI image)

EPFO interest rate FY 2025-26: The central government has decided to keep the annual interest rate on Employees’ Provident Fund deposits unchanged at 8.25 per cent for the financial year 2025–26, the Ministry of Labour and Employment said. The move is expected to benefit crores of workers by reinforcing their retirement savings.The rate will be formally notified by the Government of India, after which the Employees’ Provident Fund Organisation will credit the interest to subscribers’ accounts.The announcement followed the 239th meeting of the Central Board of Trustees of EPF, chaired in New Delhi by Union Labour and Employment Minister Mansukh Mandaviya on Monday.The ministry said that despite prevailing global uncertainties, EPFO has upheld sound financial management, enabling it to offer steady and competitive returns without placing undue pressure on its interest reserves. EPFO has managed to maintain an interest rate above 8 per cent in recent years, supported by healthy earnings from exchange-traded funds and other investments. As part of ongoing reforms, the Board also cleared a one-time Amnesty Scheme aimed at resolving compliance issues involving income tax-recognised trusts that have yet to obtain coverage or exemption under the EPF & MP Act, 1952, taking into account provisions of the Finance Act, 2026.The proposed scheme offers a six-month window for establishments and trusts to regularise their status. It is primarily designed to safeguard employees’ interests and includes waiver of damages, interest and penalties in cases where trusts have already provided benefits matching or exceeding statutory requirements. The scheme permits retrospective relaxation or exemption subject to specific conditions and ensures that eligible workers receive mandated benefits.The initiative is expected to settle more than 100 ongoing litigation matters, along with several additional cases, benefiting thousands of trust members. It will apply to exempted establishments that have complied with the provisions of the EPF & MP Act, 1952.The ministry also said the Board approved a new simplified standard operating procedure on EPF exemption. This framework merges four existing SOPs and the Exemption Manual into a single, comprehensive system aimed at easing compliance requirements. The revised SOP introduces a complete digital process for surrendering exemptions and transferring past accumulations. The technology-driven approach is intended to enhance transparency and efficiency in auditing exempted establishments. The unified system is expected to support ease of doing business, enable paperless operations, speed up processing of exemption-related cases and encourage compliance through risk-based online audits.EPFO functions as a social security institution tasked with providing provident fund, pension and insurance benefits to workers in the organised sector across the country.