EPF: 20 lakh crore economic package eases financial burden on Employee Provident Fund

To ease financial stress as businesses get back to work, the Government has decided to continue EPF Support for Business and Workers for 3 more months. From the total 20 lakh crore, the fraction for EPF will be Rs 2,500 crore. This will help in providing liquidity to business who will return with the financial burden. Further, to provide more take-home salary for employees and to give relief to employers in payment of PF, the government has reduced EPF contribution for Businesses and Workers for 3 months, amounting to liquidity support of Rs 6750 crores.

Details:

- Statutory PF contribution by employer reduced to 10% from 12% earlier; to provide Rs 6,750 crore liquidity relief. There will be no change in employer contribution to govt enterprises. However, employees (both govt and private) have to contribute only 10%

- The central government will pay 24% of the monthly wages into EPF accounts below ₹15,000 per month. For this, the employee must be in an establishment having up to one hundred employees where 90% or more of such employees earning monthly wages less than ₹15,000. Nearly 3.6 lakh establishments and 72 lakh employees have benefited from this scheme and more will continue.

- EPFO has also allowed employers to file monthly PF returns without making simultaneous payment of dues. This gave relief to about 6 lakh firms amid lockdown to combat the COVID-19 crisis. Currently, the employers are required to file provident fund (PF) returns and make payment of dues simultaneously.

- Further, The EPF scheme regulation will be amended to allow a non-refundable advance to 75 per cent of the amount standing to the credit or 3 months wages whichever is lower. This will benefit 4.8 crore workers.

After, the prime minister, yesterday, laid out a comprehensive vision for the nation post-COVID-19. Today, FM Nirmala Sitharaman announced the details of the Rs 20 lakh crore economic package under the “Atmanirbhar Bharat Abhiyaan". This will benefit areas like MSMEs, RERA, Discoms and Contractors.