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Your take home salary to increase, govt notifies cut in EPF contribution to 10%
This will benefit nearly 4.3 crore provident fund subscribers and and as many as 6.5 lakh establishments will also avail this benefit from this.
New Delhi: Employees working in private sector will get more take home salary for three months –May, June and July –as the government has notified reduction in EPF contribution for the month of May, June and July.
Finance Minister Nirmala Sitharaman had last week (May 13) announced that for the next three months employee provident fund (EPF) contribution will be 10 per cent each for employees and employers as compared to the statutory obligation of 12 per cent. The move is to increase take-home salary for employees and to give relief to employers in payment of provident fund.
The government has decided to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crores, the FM said. Under this new provision, the employers will continue to pay 12 per cent, while employees will have the option to pay 10 per cent for the next three months.
This will benefit nearly 4.3 crore provident fund subscribers and and as many as 6.5 lakh establishments will also avail this benefit from this.
However, this does not apply to those companies where government is giving the entire 24 percent contribution towards EPF.
Furthermore, in the case of the central public sector enterprises and state public sector, this exempt will not be applicable. They will continue to pay 12% as EPF contribution.
It may be noted that last week, the Employees' Provident Fund Organisation (EPFO) on Friday announced major relief to the companies stating that no penalty will be levied upon them for penalty for delayed deposit of dues during lockdown.
The move is aimed to ease the compliance norms for 6.5 lakhs EPF covered establishments and save them from liability on account of penal damages.
“Due to prolonged lockdown announced by the Govt. to control the spread of COVID-19 and other disruptions due to pandemic, establishments covered under EPF & MP Act, 1952 are distressed and unable to function normally and pay the statutory contributions in time,” an official release said.