The new EPF contribution rules will be applicable for the three months - May, June and July
It will inject liquidity of ₹6,750 crore to employers and employees over three months
The Labour Ministry has notified new rules that allow for reduced EPF or employees' provident fund contribution for three months. Last week, Finance Minister Nirmala Sitharaman had announced reduction of statutory provident fund contribution by both employers and employees to 10% of basic wages from the existing 12% for the next three months. The decision was taken to increase take-home salary for employees and give some relief to employers in payment of provident fund dues. It will inject liquidity of ₹6,750 crore to employers and employees over three months.
"Whereas due to Covid-19 pandemic, lockdown is in force across the country and the Central Government after making necessary inquiry is satisfied that to provide liquidity in the hands of employers and employees, there arises a need to amend the notification of the Government of India in the Ministry of Labour published in the Gazette of India, Extraordinary, Part II, section 3, sub-section(ii) vide number S.O. 320(E), dated 9th April, 1997," the Ministry of Labour said in a May 18 notification.
Under the Pradhan Mantri Garib Kalyan Package (PMGKP), the government supported the payment of 12% of employer and 12% employee contributions into EPF accounts. This was extended for another three months - June, July and August.
This extension of the benefit will provide a liquidity relief of ₹2,500 crore to 3.67 lakh establishments and for 72.22 lakh employees.
Under Pradhan Mantri Garib Kalyan Package, the government pays 24% of the monthly wages into EPF accounts of wage earners earning below ₹15,000 per month, who are employed in establishments having up to one hundred employees, with 90% or more of such employees earning monthly wages less than ₹15000.
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