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EPF contribution reduced to 10% for establishments other than those covered under PMGKY - Pradhan Mantri Garib Kalyan Yojana for the months May, June & July, 2020.
As per Press Information Bureau - PIB Delhi Posted On: 19 MAY 2020 6:32PM
"In Cost to Company (CTC) model, if Rs.10000/- is monthly EPF wages, in CTC Model the employee gets Rs.200/- more directly from employer as employer’s EPF/EPS contribution is reduced and Rs.200/- less is deducted from his/her wages".
That means if the employee who is contributing 12% on Rs.15K of Rs.1,800/- will contribute 10% of Rs,1,500/- and this difference in CTC of Rs.300/- the Company need to pay to the employee alongwith salary. Thus the employee will get higher salary of Rs.600/-, 300/- by way of reduced deduction and Rs.300 from employer as a part of CTC. (This is ridiculous, Govt. should have remain silent on CTC Part) Many Companies have paid full salary during lockdown period without any income.
Suresh
From India, Thane
As per Press Information Bureau - PIB Delhi Posted On: 19 MAY 2020 6:32PM
"In Cost to Company (CTC) model, if Rs.10000/- is monthly EPF wages, in CTC Model the employee gets Rs.200/- more directly from employer as employer’s EPF/EPS contribution is reduced and Rs.200/- less is deducted from his/her wages".
That means if the employee who is contributing 12% on Rs.15K of Rs.1,800/- will contribute 10% of Rs,1,500/- and this difference in CTC of Rs.300/- the Company need to pay to the employee alongwith salary. Thus the employee will get higher salary of Rs.600/-, 300/- by way of reduced deduction and Rs.300 from employer as a part of CTC. (This is ridiculous, Govt. should have remain silent on CTC Part) Many Companies have paid full salary during lockdown period without any income.
Suresh
From India, Thane
Please confirm how much % of EPF contribution employee will benefited ? 2% or 4% means only employee share or both employee & employer?
From India, Delhi
From India, Delhi
The employee under a CTC system will get 2% of employer's contribution in the form of an allowance (obviously a taxable allowance) for three months. He will gt a liquidity of 2%, ie, 2% more than what he was getting till April 2020. For an organisation which restricts contribution at 12% of Rs 15000, the maximum liquidity is Rs 300. What this amount reflects to your liquidity? At the same time, the Personnel/HR Officer has to do some additional clerical work to find out 2% and add it to the other allowances.
From India, Kannur
From India, Kannur
Dear All
As per the attached FAQ from PF office, Answer to Q.12, the Govt has given employee and employer both an option to keep contributing at 12% if they want. Please act accordingly.
Employee may approach you requesting to keep his future saving intact as this (reduction to 10%) is not going to make a big difference in his take home,rather will increase his tax liability.
The 2% of employer share will be taxable at one hand and on other hand he may fall short of his investment under section 8oC.
Regards
Puran Dangwal
From India, New Delhi
As per the attached FAQ from PF office, Answer to Q.12, the Govt has given employee and employer both an option to keep contributing at 12% if they want. Please act accordingly.
Employee may approach you requesting to keep his future saving intact as this (reduction to 10%) is not going to make a big difference in his take home,rather will increase his tax liability.
The 2% of employer share will be taxable at one hand and on other hand he may fall short of his investment under section 8oC.
Regards
Puran Dangwal
From India, New Delhi
FAQ belongs to this post. The EPF posted FAQs on their website. Can visit for more updates.
From India, Mumbai
From India, Mumbai
If you have any doubt related to recent change in EPF Contribution then please find the attached document.
From India, Virar
From India, Virar
Dear Onkar Naik, The whole Hindusthan knows the changes from 20th/21st May, 2020. Suresh
From India, Thane
From India, Thane
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