As we all know that the government has announced the new EPF contribution rules, which are going to result in a hike in the amount of monthly take-home salary of all the employees. Besides, a ₹ 2500 crores EPF contribution support shall be given to the businesses having EPF registration as well as the employees for the next three months.
Know in detail:- New EPF contribution rules
#1. What are new EPF Contribution rules as per Atmanirbhar Bharat package?
A: In the new Atmanirbhar Bharat package, the Indian Government has reduced the EPF Contribution rate to some extent. They have lowered the allowance rate to 10% from 12%. This new rule will be applicable to both the employers as well as the employees.
Know more about the Atmanirbhar Bharat package.
#2. What is the chief intention behind this sudden rate reduction?
A: With the reduction, both the employers and the employees will not have to pay a less amount of capital to the EPF contribution. It, in turn, will be beneficial for the liquidity crisis, which the country is facing due to the Coronavirus outbreak.
#3. How long will this EPF contribution rules applicable in India?
A: As per reports, the statutory contribution rate will be pertinent for three months in the year 2020. These are – May, June, and July.
#4. How can an individual access the official notification of the same?
A: The Gazette of India has published the official notification of EPF registration on both their journal and website on 18th May 2020. Additionally, a person can also find the notification on the official EPFO website. It will be available on the homepage of the same, under the COVID-19 Tab.
#5. Which establishments eligible for EPF contribution rules?
A: Almost each and every Government-based establishment in India is eligible for this new constitutional pronouncement. However, the State and Central Public Sector organizations are not entitled to it. Additionally, the new rate also does not favour the companies, which are savouring the advantages of PMGKY.
#6. Whether new EPF contribution rules apply to exempted establishments?
A: Yes, all the rules and regulations regarding the rate is applicable to the exempted establishments as well.
#7. Can the employees or employers contribute more than the asked rate?
A: The Indian Government has definitely reduced the EPF Contribution rate to 10%. However, they have not made the rule mandatory or obligatory. So, if anyone wants to, then they can pay up at a higher rate as well.
#8. Will the statutory rate affect the pension distribution in any way?
A: It is true that the EPS gets its funding from the EPF contributions. However, the same will not happen in this case. Hence, the reduced rate will have no effect whatsoever on the pension payment factors.
#9. Can the organizations avail PMRPY benefits be eligible for this statutory rate?
A: Yes, the establishments, which are currently being served under the PMRPY offerings, are eligible for the reduced contribution rate.
#10. How will the reduced rate benefit the employees?
A: With the new rule, the employees will not have to pay a high amount of contribution fee anymore. Hence, in this case, they will get higher home pay, which can resolve their liquidity issues. For example, if an employee gets a salary of ₹20,000, then they will, now, have to compensate only ₹2,000. Previously, they would have to pay around ₹2,400.
These are the new EPF contribution rules for the businesses and the employees.
In case you require any sort of assistance regarding the EPF registration, please feel free to contact us at 8881-069-069.
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