EPFO: Modi Govt enables higher take home salary for 4.3 cr members; Know how
In a major relief to the salaried class, the Narendra Modi Government has increased the take home salary of over 4.3 cr employees who are members of the Employees’ Provident Fund Organisation (EPFO)
In a major relief to the salaried class, the Narendra Modi Government has increased the take home salary of over 4.3 cr employees who are members of the Employees’ Provident Fund Organisation (EPFO). This decision has been taken to help people deal with the coronavirus pandemic and will directly impact the EPFO members. Pic Credit: Reuters
As part of the Atmanirbhar Bharat package, the government has reduced the rate of EPF contributions from 12 per cent to 10 per cent of basic wages and Dearness Allowances from existing rate of 12 percent for all class of establishments covered under the EPF & MP Act, 1952. Pic Credit: PTI
While this move will benefit 4.3 cr employees, the decision will also help over 6.5 lakh establishments and help them tide over the immediate liquidity crisis. Pic Credit: PTI
As a result of reduction in statutory rate of contributions from 12 per cent to 10 per cent, the employee shall have a higher take home pay due to reduction in deduction from his pay on account of EPF contributions and employer shall also have his liability reduced by 2 per cent of wages of his employees. Pic credit: Reuters
Know the calculation: If Rs 10000/- is monthly EPF wages, only Rs 1000/- instead of Rs 1200/- is deducted from employee’s wages and employer pays Rs 1000/- instead of Rs 1200/- towards EPF contributions. Pic Cedit: PTI
The reduction in statutory rate of contributions is applicable for wage months May 2020, June 2020 and July 2020 and has been notified vide SO 1513 (E) published in the Gazette of India on 18 May 2020. The notification is available under the TAB- COVID-19 on the home page of EPFO website.
The facility is applicable to all class of establishments covered under the EPF & MP Act, 1952, except the establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central Government or State Government.