Central provident fund commissioner R S Kaushik told newsmen here that interest rate on PF is fixed every year by the employees provident fund (EPF) board during the new financial year.

He said there could be no arbitrary changes in the interest rates without the board's approval that comprised of over 40 members including representatives from trade unions, apex trade bodies and the government.

Presently the interest rate stood at 12 per cent, that if compounded worked out to around 13.5 per cent which he said was quite substantial. Asked if there was possibility of a rise in interest rate in future, Kaushik said at present it was not possible as anything beyond 12 per cent will attract tax under the present income tax laws.

Kaushik's clarifications came in the wake of reports that the government was considering marginally reducing theinterest rate in the same way as it had brought down the interest rates on postal small saving schemes from 10 per cent to 9 per cent from January 1 this year.