On Tuesday, the labour ministry said employees' basis their discretion can contribute more than the 10% limit set amid the corona crisis to their EPF account, but employers do not need to contribute a higher percentage to the retirement fund of their workforce.
"Under the EPF Scheme, 1952, any member has the option to contribute at a rate higher than statutory rate (10 per cent) and employer can restrict his contributions 10 per cent in respect of such employee", said the ministry in a statement.
The statement further detailed that employer contribution to the EPFO-run provident fund scheme shall be at statutory rate of 10 per cent of the basic wages for the month of May, June and July due in June, July and August.
On Monday, the labour ministry notified the reduced rate of PF contribution by both employer and employee at 10%, thereby increasing take home pay of 4.3 crore EPF subscribers. Also, at the same time the burden of establishments covered under EPFO has also been reduced substantially in the current distressed times.
As part of its economic relief package, Finance minister Nirmala Sitharaman last week announced a cut in EPF contribution rate from the current 12% of basic wages plus DA to 10% for both employees and employers for the next 3 months.