New Delhi: A big change is going to happen for the salaried people from August. Due to Coronavirus epidemic, the Modi government at the Center had reduced the Employees Provident Fund (EPF) contribution from 12 percent to 10 percent for 3 months. This decision was made so that during that difficult time, the employee gets more cash in hand salary. Now three months of that period have been completed, hence PF will be cut from August at the rate of 12 percent. Due to this, now less salary will come back in the hands of the employee.
In May, as part of the government's self-reliant India package, Union Finance Minister Nirmala Sitharaman announced that for the next three months, the total contribution of employees and employers in the EPF will be 20 percent instead of 24. The announcement was made for the months of May, June and July. According to EPF rules, the employee's basic salary and 12 per cent of DA per month is deposited in EPF contribution. Similarly, the employer also deposits 12 percent. In this way, a total of 24 percent amount is deposited by the Employee's PF Account.
Of this, 12 percent of the employee and 3.67 percent of the employer are deposited in the EPF, while 8.33 percent of the contribution of the employer goes to the Employees Pension Scheme (EPS). The government had announced a reduction of 4 per cent in EPF contribution for 3 months, due to which 43 crore employees of 6.5 lakh companies benefited by about Rs 2250 crore per month.