Take home salaries for employees will increase as Finance Minister Nirmala Sitharaman reduces provident fund deduction

Take home salaries for employees will increase as Finance Minister Nirmala Sitharaman reduces provident fund deductionUnsplash
  • As businesses begin to get back to work, the FM announced reduction in Employees' Provident Fund.
  • This means that the take home salary of employees will go up.
  • The statutory PF contribution is being reduced to 10% from 12%
The coronavirus pandemic has hit businesses across sectors in India and today, Finance Minister (FM) Nirmala Sitharaman announced a set of relief measures for the industries.

As businesses begin to get back to work, the FM announced reduction in Employees' Provident Fund (EPF). This means that the take home salary of employees will go up.

“The statutory PF contribution is being reduced to 10% from 12% so that employers will have some more money in their hands. However, for PSUs we will continue to pay the 12%,” she said.

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Sitharaman said that the EPF contribution will be paid by the government of India and 72.22 lakh employees will benefit from it. The EPF contribution is being reduced for Businesses & Workers for 3 months, amounting to a liquidity support of ₹6,750 crores.

The measures have been taken under Prime Minister Narendra Modi’s ₹20 lakh crore stimulus package. “Liquidity relief has been given for all EPF establishments. We extend the support that the government of India gave for another three months. Nearly 3.6 lakh establishments benefitted from this,” said Sitharaman.

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Earlier in March, under Pradhan Mantri Garib Kalyan Yojana (PMGKY) the central government had launched this EPF contribution scheme to help the economically weaker sections. Having already covered the salaries of March, April and May, now the salaries of June, July and August 2020 will come under this scheme.

“Govt of India will pay the Employees' Provident Fund (EPF) contribution, both of employer and employee, put together it will be 24%, this will be for next 3 months.This is for those establishments which have upto 100 employees and 90% of them earn less than ₹15,000,” the finance minister said.

See Also:
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