EPF interest delays: How does it impact compounding, tax filing?

Subscribers urge EPFO to credit interests on time amid rising concerns over fund transparency, tax implications

- Shipra Singh

Chennai-based Sudarshan Jain was in for a shock when he checked his Employee Provident Fund (EPF) passbook in August this year. Interest on his EPF for the financial year 2023 and 2024 had not been credited. The timeline coincided with his job change, so he was convinced that his account never got transferred from his previous to current employer.

"I enquired with my company and they informed me that the account was transferred successfully. I ran helter skelter for one month trying to figure out whether my job change had impacted interest credit or if there was another reason. On not getting a response from EPFO support, I went to their X (erstwhile Twitter) account to lodge a complaint, only to find out there were several others like me," he said.

Jain is right. Delay in EPF interest payment is a common concern for several subscribers. This issue is not specific to any one financial year and, in fact, recurs year after year. Moreover, changing companies does not impact the interest payment since EPFO systems calculate the interest till date of claim settlement, said Vishwanath B G, associate director, Mercer Wealth India.

A quick glance at EPFO's X account shows the scale of the problem of delays in interest credit. Most complaints are with respect to the credit of interest for the financial year 2023-24 as the EPFO had revised the rate to 8.25%.

In a response to a customer's grievance raised on X, EPFO replied that 93% cases have been already processed since August 2024 for the interest payment for FY 2023-24. A few customers have also complained about not getting interest for FY 22-23, as is the case with Jain.

The concern for most subscribers is that they might be losing the benefit of compounding due to the delays in interest payment.