Do you know your in hand salary likely to be reduced from this month; here’s know why
In May, the government decided to reduce PF contribution from 12% to 10% for 3 months. This step was taken so that the employer in the Corona period and the employer who gave them salary, had some more money in their hands. These 3 months are now complete, so now from August your employer will return to the old deduction rates. That is, from August, the EPF will be cut by 12 percent as before.
Employees get Rs 2,250 crore more salary every month
In May, Union Finance Minister Nirmala Sitharaman slashed the EPF contribution by 4 per cent for 3 months. As a result, employees of about 6.5 lakh companies benefited about Rs 2,250 crore every month.
What was the loss in PF fund?
As per the rule, the amount of money the employee deducts for the PF fund, the same amount of money the employer has to pay for this fund. In this case, if your basic salary is 15 thousand rupees, then instead of Rs 1,800 rupees in PF, now the contribution of 1,500 will go and the same will be added to your company. That is, every month your PAF fund will reach 600 rupees less. This rule is for 3 months, that means a total of Rs 1800 will be reduced in your PF account.
If you are 30 years old and you have 1800 less in your account, then at the age of 60 years you will get Rs 22,445. At the same time, if you are 40 years old, then at the age of 60 you will get Rs 9,679. Currently, 8.5% per annum interest is being earned on PF account.
What is the rule?
Employees and employers collect 24% according to the EPFO rule. It consists of 12% Basic Salary and Dearness Allowance (DA) – as EPF deduction every month for the retirement fund created by the Employees Provident Fund Organization. The company deposits this much money in EPFO.