Retirement fund body EPFO on Saturday decided to lower the interest on provident fund deposits for 2021-22 to an over four-decade low of 8.1 per cent for its about five crore subscribers, from 8.5 per cent provided in 2020-21, sources said.

This is the lowest since 1977-78, when the EPF interest rate stood at 8 per cent.

"The Employees' Provident Fund Organisation's (EPFO's) apex decision making body Central Board of Trustees has decided to provide 8.1 per cent rate of interest on Employees Provident Fund (EPF) for 2021-22 in its meeting held on Saturday," a source said.

The 8.5 per cent interest rate on EPF deposits for 2020-21 was decided by the Central Board of Trustees (CBT) in March 2021.

It was ratified by the finance ministry in October 2021 and thereafter, EPFO issued directions to field offices to credit the interest income at 8.5 per cent for 2020-21 into the subscribers' account.

Now, after the CBT decision, the interest rate on EPF deposits for 2021-22 will be sent to the Ministry of Finance for concurrence. EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.

In March 2020, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19.

The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5 per cent.

EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18.

The rate of interest was slightly higher at 8.8 per cent in 2015-16.

It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. The rate of interest was 8.25 per cent in 2011-12.

Reduction in EPFO interest rate BJP's 'return gift' to people following assembly poll win: Congress

Taking a swipe at the government, the Congress on Saturday said the reduction in EPFO interest rate was a "return gift" of the BJP to people following its victory in the just-concluded assembly polls.

"The income of 84 per cent people of the country has decreased. Is it right to attack the savings of crores of employees on the basis of electoral victory?" asked Congress general secretary and chief spokesperson Randeep Surjewala.

"The EPFO has reduced the interest rate on PF deposits to the lowest level in 10 years. Is this the 'return gift' of BJP's victory," he asked in a tweet in Hindi.

Interest rate on employees' provident fund deposits on Saturday was proposed to be cut to a four-decade low of 8.1 per cent for the current 2021-22 fiscal from 8.5 per cent in the previous year, sources said.

This is the lowest interest rate since 1977-78 on deposits that employees make towards their retirement fund. Interest rate on employees provident fund that year stood at 8 per cent.

The interest rate for the current fiscal year ending March 31 was set by the retirement fund body EPFO for its about five crore subscribers.

In the just-concluded assembly elections to five states, the BJP won in four -- Uttar Pradesh, Uttarakhand, Manipur and Goa - while the AAP swept Punjab.