Government has announced a reduction in EPF contribution for the month of May, June and July. This implies that the employees working in private sector will get more take home salary for three months
Finance Minister Nirmala Sitharaman had last week 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. 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 3.6 lakh establishments and as many as 72.22 lakh employees will also avail this benefit, said FM Sitharaman. However, this does not apply to those companies where government is giving the entire 24 percent contribution towards EPF.
Employees’ Provident Fund Organisation (EPFO) also 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.