Reduction of Interest Rates on Public Provident Fund

Reduction of Interest Rates on Public Provident Fund

Interest Rates on various Small Savings Schemes for the 1st Quarter of 2016-17 notified;. Additional Interest Rate spreads which the Government allows on Small Savings Schemes like PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme and NSC etc. are being continued and included in the rates notified today.

From the year 2012-13, the interest rates on various Small Savings Schemes (SSS) are recalculated and notified in the month of March every year. These rates are applicable for the next financial year. This is being done in line with the recommendations of the Shyamala Gopinath Committee to ensure that the interest rates of Small Savings Schemes are market linked.

Accordingly, as done in the previous years, the interest rates for various Small Savings Schemes were due for recalculation in March 2016. As notified on 16th February, 2016, instead of annual resetting of interest rates for the next financial year, the interest rates from now on will be reset every quarter based on the G-Sec yields of the previous three months. Consequently, the interest rates for various Small Savings Schemes were recalculated with reference to the G-Sec yields of equivalent maturity for the months December 2015 to February 2016. Based on this calculation, the interest rates on various Small Savings Schemes for the 1st quarter of 2016-17 have been notified today. The rates of interest on various small savings schemes for the First Quarter of Financial Year 2016-17, on the basis of the interest compounding/payment built-in in the schemes, shall be as under:

This is a formula driven process.

Further, as notified earlier, the additional interest rate spreads which the Government allows on Small Savings Schemes like PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme, NSC etc. are being continued. The additional spread for these Schemes are 25 basis points for PPF, 100 basis points for Senior Citizen Savings Scheme, 75 basis points for Sukanya Samridhi Scheme, 25 basis points for five year time deposit, 25 basis points for National Savings Certificate and 25 basis points for Monthly Income Scheme. These additional interest rate spreads are being continued and are included in the rates notified today.

The quarterly revision of interest rates will ensure that the interest rates under Small Savings Schemes are more dynamically related to the current market rates, thereby enabling the Banks to move their interest rates in line with current money market rates.

Source: PIB News

Centre decides to withdraw tax on Provident Fund

Centre decides to withdraw tax on Provident Fund

News have surfaced that the Prime Minister has instructed the Finance Minister to put a hold on the proposed plan to impose taxes on PF withdrawals. Finance Minister Arun Jaitley is expected to make an official announcement in this regard shortly.

Employee unions all over the country have been vehemently opposing the proposed tax on the withdrawals made on the most important savings of a worker, from the moment the announcement was made. Most employees depend on their provident fund savings to meet some of the most important expenses of their lives, like medical, marriages, building a house, etc. The decision to impose tax on these withdrawals was condemned by all.

Jaitley had announced a tax on 60 percent of the Employee Provident Fund, and Public Provident Fund. The government has now said that they had planned to impose tax only on the PF Interest. But, there was strong opposition for this too. Demands were made to withdraw this tax.

According to information available, Jaitley had informed at the meeting of the MPs that the Prime Minister will have to decide on this. Meanwhile, the Prime Minister has recommended the Finance Minister to stop the tax on the PF withdrawals, and to conduct a thorough study on this. Arun Jaitley is expected to take the required action after consulting with the officials of his ministry. The Prime Minister’s intervention has restored the peace of mind of more than 60 lakh Government employees.

One time permission for change over from CPF to GPF Scheme for teaching and non-teaching staff of Kendirya Vidyalaya Sasngathan

One time permission for change over from CPF to GPF Scheme for teaching and non-teaching staff of KVS

KENDRIYA VIDVAlAYA SANGATHAN

18-INSTITUTIONAL AREA,

SHAHEED JEET SINGH MARG,

NEW DELHI -110016

F.No. 110125/2015/KVS/CPF to GPF /GR.KVS/928

Dated: 15/6/15

Shri M. Krishnan,

Secretary General,

Confederation of Central Govt. Employees & Workers,

1st Floor, North Avenue, P.O. Building ,

New Delhi – 110001.

Subject: Conversion from CPF to GPF.

Sir,

I am to refer to your letter no. KVS/2013-2015 dated 29.04.2015 addressed to the Secretary, MHRD on the captioned subject and to inform you that the matter regarding one time permission for change over from CPF to GPF Scheme for teaching and non-teaching staff of KVS was considered by MHRD in consultation with Department of Expenditure. The Ministry of HRD vide their letter No. F.3-14/2012-UT-2 dated 7th April, 2015 has informed that the Department of Expenditure after examining the proposal has inter-alia observed as under:

“The employees of Kendirya Vidyalaya Sasngathan who were in service as on 1.1.1986 and decided to opt for CPF made a conscious decision knowing well that the option once exercised is final. Grant of one more option to such CPF subscribers in KVS could have repercussion elsewhere with such an option having to be extended to all other CPF beneficiaries as well whose number is quite substantial.

In view of the above position, the proposal for grant of one time permission for changing from CPF to GPF cum Pension Scheme for teaching and non-teaching staff of KVS is not agreed to.”

Hence, it is not possible to accept your request accordingly.

Yours faithfully,

(Govind Kumar)

Finance Officer

Source: Confederation

GPF Resolution 2015-16

GPF Resolution 2015-16 – Finmin published today

This for general information that during the year 2015-16, accumlations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8.7% per annum.

The resolution appears as image below for your information…