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Now the contribution of PF to be decided by the will of the employee!

Wednesday - December 11, 2019 11:46 am , Category : BUSINESS
Modi Government going to introduce new rules for PF and take-home salary
Modi Government going to introduce new rules for PF and take-home salary

If employees want, they may own increase their take-home salary

DEC 11 (WTN) - If you are employed, then the Modi Government is going to make a new rule related to your salary. With this new decision of the Modi Government, the employees will now be able to determine for themselves how much amount they can contribute to their PF Fund every month. Actually, as you know that right now the amount of contribution of PF of employees and the company is decided by the rules made by the government. But the Modi Government is going to introduce a new bill in the Parliament, in this bill, employees are being empowered to contribute PF amount as per their wish.

Actually, the Modi Government may soon introduce the Social Security Code Bill 2019 in the Parliament. According to the information, many provisions have been made in this new bill. In this bill, employees have been given the right to contribute less-amount for PF if they wish. That is according to the new rule, if the employees want, they can contribute their PF amount less than 12 percent. The bill has already been approved by the Union Cabinet. On the other hand, if this bill is passed in the Parliament, the EPFO will soon notify this rule.

What is the whole matter; let us tell you in detail. Actually, the rules are being changed by the government for the contribution made by the employees for the PF. According to the current rules, both the organized sector employees and the company contribute 12-12 percent of the basic salary to the Employees Provident Fund (EPF). But after the new rule is implemented, the employee's share in the PF contribution can be between 9 to 12 percent as per his choice and it will depend on the will of the employee how much amount he wants to contribute to his PF between this specified limit. But the contribution from the company towards PF will remain the same 12 percent of the basic salary.

It is clear that with the implementation of the new rule, if the employees want, then their take-home salary will be more, but they will be able to get less money in the provident fund at the time of retirement as the contribution of PF every month from the employees are reduced in the provident fund. They will accumulate less money. That is if the employees contribute less PF from their basic salary every month, then they will get more take-home salary but their provident fund will decrease.

Now you must be thinking that what the Modi Government wants to achieve through this new bill, then the opinion of economists is that the purpose of the Modi Government is that if people will contribute less PF, then their take-home salary will be more comparatively before, and if people's take-home salary is high, then it will increase people's spending capacity and when people spend more, it will increase the cash in the market, which will accelerate the industry and business.

However, the rule of the employee's contribution to the PF is being discussed for the last five years. By the way, for your information, let us know that this new rule of the provident fund will apply only to select sectors. According to the information, this new rule can be applied to sectors like MSME, textiles, and startups. Now it has to be seen how popular and acceptable will be this new rule of PF contribution among the employees after passing this bill. At the same time, it has to be seen that if this rule proves beneficial for employees, companies, and industries, will it be applicable to other sectors besides selected sectors or not?