EPF contribution cut means higher take-home salary but more tax, say experts
Updated : May 14, 2020 09:22 PM IST
The union government on Wednesday announced reduction of employees’ provident fund (EPF) contribution by both employers and employees to 10 percent of basic wages from the existing 12 percent for the next three months.
The government said that the move will place more liquidity in the hands of employees and some relief to the employer as well.
According to experts, the decision will increase the take-home salary, but at the same time it will reduce investments under section 80(C) for the financial year 2020-21. This means taxpayers will end up paying more taxes with the reduced EPF rate of 10 percent.