EFPO or Employees’ Provident Fund Organisation has around six crore subscribers and manages a corpus of Rs. 10 lakh crore.
According to the Economic Times, the government is considering to lower the rate of contribution towards the Employees’ Provident Fund (EPF). Currently, the contribution paid by both an employee is 12 percent of basic wages plus dearness allowance plus retaining allowance and the same rate of contribution is payable by the employer as well.
However, trade unions have decided to oppose the proposal saying this will dilute these social security schemes.
IMPACT– Employees’ take home (In-hand) salary will increase, overall CTC may decrease if difference of 2% of Employee Contribution and 2% of Employer Contribution are not adjusted in other salary heads and less Income Tax benefit under section 80C.