• Government has notified cut in Employees Provident Fund (EPF) contribution to 10% for May, June, July.
• The Centre has notified the reduction in statutory rate of contributions from 12 per cent to 10 per cent for wage months period from May to July 2020 for all class of establishments covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.
• Reduction in rate of EPF contributions from 12 per cent to 10 per cent of basic wages and Dearness allowances is intended to benefit both 4.3 Crore employees. As a result of the reduction in the statutory rate of contributions, the employee will have a higher take-home pay.
• This reduction of the rate of contribution is not applicable to establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central or State Government.
• The reduced rate is also not applicable for Pradhan Mantri Garib Kalyan Yojana-PMGKY beneficiaries.
Mains Paper 3: Economy
Prelims level: EPF contribution