The Supreme Court (SC) in a judgement has brought about certain sweeping changes in the savings that end up forming the Employee Provident Fund Organisation (EPFO) corpus.
The apex court in its judgement has ruled that special allowance is part of the basic wages for computing the employee's provident fund (EPF). This means lesser take-home salary in the immediate term, but a larger retirement corpus when you leave the workforce.
While the order came on March 1, several questions with respect to its implementation still need to be answered. Preeti Chandrashekhar, India business leader, Mercer and Punit Gupta, partner EY, discussed the same.