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Business News/ Companies / News/  Centre eases PF submission deadline, giving firms 12,000 cr boost
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Centre eases PF submission deadline, giving firms ₹12,000 cr boost

Companies will not be required to deposit the 24% of basic and HRA deductions as EPF contribution

The government has extended the deadline by 30 days. (Photo: Pardeep Gaur/Mint)Premium
The government has extended the deadline by 30 days. (Photo: Pardeep Gaur/Mint)

The Centre on Wednesday pushed back the deadline for depositing monthly statutory provident fund deductions of millions of workers that will allow thousands of establishments to have an immediate liquidity benefit of around 12,000 crore.

The deadline for depositing the Employees’ Provident Fund (EPF) contributions was extended by 30 days, keeping in mind the business losses due to the nationwide lockdown to curb the covid-19 outbreak, the retirement fund manager notified on Wednesday.

Companies will not be required to deposit the 24% of basic and HRA deductions as EPF contribution—12% of the employers’ share and 12% of the employees’ share—for March on the earlier deadline of 15 April.

“The… decision of ministry of labour and employment is to support and provide relief to employers of establishments which have disbursed wages for March 2020 to its employees and an incentive to employers for wage payment to employees during covid-19 pandemic," the ministry said in a statement.

The ministry said the move was in keeping with the objective of the Pradhan Mantri Garib Kalyan Yojana to prevent disruption in employment and ensure earnings to employees.

Michael Dias, a Central Board of Trustees member of the retirement fund manager and general secretary of the Delhi Employers’ Association, welcomed the extension, but demanded the 24% EPF contribution of employees’ and employers’ share be waived till the situation improves.

EPFO receives a monthly statutory PF and pension contribution of 12,000-12,500 crore.

Another official said there might be a further extension as the covid-19 situation cannot be predicted and it is unlikely that things will be normal after 20 days. “I feel it may get extended by another one month, which means nearly 24,000 crore of short-term liquidity in the hands of employers," the official said on condition of anonymity.

“The government is asking employers to pay salary during the crisis. Where is the cash flow?… Even if I am paying to a worker, who is not on job on humanitarian ground, why should one pay for the statutory contribution?," Dias said.

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Published: 15 Apr 2020, 08:47 PM IST
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