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Union Finance Minister Nirmala Sitharaman and Minister of State for Finance Anurag Thakur addressed a press conference to give details of the Rs 20 lakh cr relief package announced by PM Narendra Modi under the Atma Nirbhar Bharat Abhiyaan.
In a separate tranche, it was announced that the Provident Fund (PF) contribution rates were lowered to 10 per cent.
The Employee Provident Fund (EPF) is an arrangement that helps employees save a significant amount for retirement.
In this scheme, an employee has to contribute 12 per cent of their basic income towards the fund every month. The employer contributes an equal amount to the fund.
When the employee retires, he/she is entitled to receive the total amount (personal as well as the employer's contribution) as a lump sum along with interest (earned during the period of employment)
The existing rate of contribution towards the provident fund contributed by both the employer and employee is 12 per cent, however, it has been reduced to increase the take-home salary of employees, provide liquidity in the hands of the business and the employees.
It would be in effect for a three-month period, applicable on May-June-July salary period and would be applicable to all establishments covered under the Employees Provident Fund Organisation (EPFO) including the exempted establishments.
4.3 crore provident fund subscribers and 6.5 lakh establishments are expected to benefit out of the measure.
However, it is important to note that the government which is the employer in the case of the central public sector enterprises and state public sector will continue to pay 12% as its share.
Another exception is the establishments covered under the earlier announced Rs 1.7 lakh crore Pradhan Mantri Garib Kalyan Yojana. Such establishments will not be covered under the said notification.
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