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The Labour Ministry has initiated the process to deposit the employer’s and employee’s contribution in the Employee Provident Fund (EPF) and Employee’s Pension Scheme (EPS). This is expected to benefit around 79 lakh subscribers and 3.8 lakhs establishment.
This is part of the PM Gareeb Kalyan Yojana scheme. As th per scheme, the Government will contribute the employee’s and employer’s share in the EPF and EPS for a period of three months.
However, this benefit will be available to an industrial unit which has upto 100 employees, of which at least 90 per cent should have monthly wage of less than Rs 15,000.
Understanding the EPF
EPF is a post-retirement scheme in which industrial units with a certain number of workers need to contribute a part of their salaries (i.e the basic salary and dearness allowance) to the corpus. There are two rates of EPF contribution: 12 per cent and 10 per cent.
Industrial units which have more than 20 employees will have an EPF contribution rate of 12 per cent, while industrial units with fewer employees will have an EPF contribution rate of 10 per cent.
In both the cases, an equivalent contribution is made by the employer. While the entire share of the employee is contributed towards the EPF, 8.33 per cent of the employer’s share goes towards EPS and the remaining contributed towards the EPF.
According to EPFO, the relief announced by the Government can be claimed by the eligible organisations/establishments by filing an Electronic Challan-cum-Return (ECR). The amount that is due, on behalf of Employers and Employees reflected in the ECR on account of EPF and EPS (24 per cent wages), will be credited by the Central Government for three months in the UANs of the contributory EPF members of eligible entities. Total outgo will be Rs 4800 crore for a period of three months.
The employer in relation to any eligible establishment, will disburse wages for the month to all employees of the establishment and ECR with required certificate and declaration to avail the benefit under the Scheme. After ECR is uploaded and eligibility of establishment and employees is validated, then the challan will separately show amount of employees’ and employers’ contributions due as Central Govt. relief in respect of eligible employees and the remaining amount payable by the employer.
After the employer remits the payment due from him for other employees, as reflected in challan, the EPF and EPS contributions will be credited directly in the UANs of the eligible employees of the establishment by the Central Government
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