Finance Minister Nirmala Sitharaman in May had announced that monthly Employees’ Provident Fund EPF contributions (of both employers and employees) were to be reduced from 24 per cent to 20 per cent for the months of May, June and July 2020 as part of relief measures under the Atma Nirbhar Bharat package.
Now the EPF contributions will be deducted at 12%, starting August 1. According to the rule, employees and employers deposit 24 per cent.
Which means, 12 per cent each of basic salary and dearness allowance (DA) as EPF deductions every month for the retirement kitty maintained by the Employees’ Provident Fund Organisation (EPFO).
The statutory deduction was cut by a total of 4 per cent (2 per cent of the employer’s contribution and 2 per cent of employee’s contribution).