New Delhi: The Ministry of labour and empowerment has implemented the previously-announced decision of slashing Employee Provident Fund (EPF) contributions to 10 percent from the existing 12 percent.
A notification, the labour ministry issued on Monday, reads that the reduction in EPF contributions shall be applicable "in respect of wages payable by it for the months of May, June and July 2020."
Therefore the take home pay due in June, July and August would increase, while the employers' contributions due in June, July and August would reduce.
The latest move will mean a saving of 2 percent made as on EPF deductions for organized sector staffers. Approximately 4.3 crore heads are believed to be employed in the organized sector. The move is likely to improve the liability of 6.5 lakh employees reeling under liquidity crunch according to the ministry.
The move has been directed for deductions made for three months up to July.
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The outcome of the 2 percent savings percolates into a total of Rs 6,750 crores for three months.