Government notified reduced rate of EPF Contribution at 10%

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EPF Contribution rate reduced to 10% for next three months

EPF Contribution rate reduced to 10% for next three months
MINISTRY OF LABOUR AND EMPLOYMENT 
NOTIFICATION 
New Delhi,  the 18th May, 2020

S.O. 1513(E).—Whereas due to Covid-19 pandemic, lockdown Is in force across the country and the Central Government after making necessary inquiry is satisfied that to provide liquidity in the hands of employers and employees, there arises a need to amend the notification of the Government of India in the Ministry of Labour published in the Gazette of India, Extraordinary, Part II, section 3, sub-section(ii) vide number S.O. 320(E), dated 9th April, 1997;

Therefore, in exercise of powers conferred by first proviso to section 6 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Central Government, after making aforesaid inquiry, hereby makes the following amendments in the said notification number S.O. 320 (E) dated the 9th April, 1997, namely:-

In the said notification, in SCHEDULE II, after clause (iv), the following clause shall be inserted,
namely:-
“(v) Any establishment, other than Central Public Sector Enterprises and State Public Sector Enterprises and other establishments owned by, or under the control of the Central Government or the State Government, as the case may be, in respect of wages payable by it for the months of May, June and July, 2020”.
Provided that this clause shall not be applicable to the establishments eligible for relief under the Pradhan Mantri Garib Kalyan Yojana guidelines issued by the Employees’ Provident Fund Organization
vide its Office Memorandum No.C-1/Misc./2020-21/Vol.II/Pt. dated 9th April, 2020 

Summary of the aforesaid notification :

►Period covered by the notification
May 2020 to July 2020

►Rate of employers and employees monthly EPF contribution 
Reduced rate 10% will be applicable  

►Applicability of reduced rate 
All establishments except Central Public Sector Enterprises and State Public Sector Enterprises and establishments owned by, or under the control of the Central Government or the State Government.

Also benefit of reduced rate not applicable to establishment eligible for Pradhan Mantri Garib Galyan Yojana 

►Impact of reduction in rate
Reduction in the rate of contribution will result into increased take home salary in the hands of the 4.3 crore employees and provide relief to 6.5 lakh establishments.


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