Economy

Your take-home salary may go up as govt moots cut in PF contribution, says report

Updated : August 29, 2019 10:04 AM IST

The suggestion is part of the proposed Employees’ Provident Fund and Miscellaneous Bill, 2019.

Presently, the mandated EPF contribution is 24 percent of basic pay, divided equally between employers and employees.

In a move to increase take-home salary, the government has suggested to reduce the contribution made by employees towards the Employees’ Provident Fund (EPF), reported Business Standard.

The worker's eligibility to get the benefit would depend on their age, gender or pay grade while the employer's share will remain unchanged, the report added.

"Flexibility has been proposed to be introduced in the (EPF and MP) Act to prescribe different rates of contribution for such period for any class of employee. No change in employer’s contribution has been proposed," the ministry said.

The suggestion is part of the proposed Employees’ Provident Fund and Miscellaneous Bill, 2019.

There is a separate proposal which will allow employees to switch between the Pension Fund Regulatory and Development Authority-run National Pension Scheme (NPS) to the Employees Provident Fund Organisation (EPFO) scheme.

Presently, the mandated EPF contribution is 24 percent of basic pay, divided equally between employers and employees. It is compulsory for employees to earn Rs 15,000 a month and for employers with at least 20 workers.

"To instil discipline in the working of assessing officers, the government has suggested a time period of two years for inspectors to conclude their inquiries, under this Act. Otherwise, inspectors will have to submit reasons in writing to the EPFO’s central provident fund commissioner," the ministry added.

This update is in sync with the Pradhan Mantri Shram Yogi Maan Dhan pension scheme unveiled for unorganised sector workers. A draft of the Amendment Bill dated August 23 has been circulated and will be open for comments up to September 22.

Have you signed up for Primo, our daily newsletter?

It has all the stories and data on the market, business, economy and tech that you need to know.

To keep watching CNBC-TV18, India's No. 1 English Business News Channel, call your Cable or DTH Operator and subscribe now for just Rs. 4 per month. You can also subscribe to CNBC-TV18 Prime HD for Re 1/- per month.Find out more