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EPF contributions of women employees cut to 8% for first 3 yrs

EPF contributions of women employees cut to 8% for first 3 yrs


Mangalore Today News Network

New Delhi, Feb 01, 2018 : The government today announced a reduction in women employees’ contribution to EPF to 8 per cent for first three years and extended the fixed-term employment facility to all sectors to create more jobs.

 

pension 1 feb 18


Besides, it also proposed to extend the facility of payment of 12 per cent employers’ contribution by government towards social security schemes run by Employees Provident Fund Organisation (EPFO) for new employees for first three years of their employment to all sectors.

"To incentivise employment of more women in the formal sector and to enable higher take home wages, I propose to make amendments in the Employees Provident Fund and Miscellaneous Provision Act 1952, to reduce women employees’ contribution to 8 per cent for first three years of their employment against existing existing rate of 12 per cent or 10 per cent with no change in employers’ contribution," Finance Minister Arun Jaitley said in his Budget Speech today.

"The government will contribute 12 per cent of the wages of the new employees in the EPF for all the sectors for next three years. Also the facility for fixed-term employment will be extended to all sectors," he said.

At present, the fixed term employment facility is available to sectors employing large number of workers like textiles, leather and footware under the the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).

The government pays 8.33 per cent of basic wages as employers’ contribution toward Employees’ Pension Scheme (EPS) for other sectors and the firms are paying 3.67 per cent as their share of contribution towards Employees Provident Fund under the PMRPY.

The government claimed that such measures in the past have been paying dividends and would result in creation of 70 lakhjobs this year as per an independent study.

"Proposed changes to PF scheme by way of Government PF contributions for new employees and reduced PF contributions by employers for women for first three years will help in promoting employment growth, and more so for employment of women," said Alok Agrawal, Senior Director, Deloitte Haskins & Sells.

The Budget 2018-19 also proposed to bring in liberalised scope of employment generation incentives available under 80JJAA of the Income Tax Act.

Currently, a deduction of 30 per cent is allowed in addition to normal deduction of 100 per cent in respect of emoluments paid to eligible new employees who have been employed for a minimum period of 240 days during the year under section 80-JJAA of the Income-tax Act.

However, the minimum period of employment is relaxed to 150 days in the case of apparel industry.

The minister said, "In order to encourage creation of new employment, I propose to extend this relaxation to footwear and leather industry. Further, I also propose to rationalise this deduction of 30 per cent by allowing the benefit for a new employee who is employed for less than the minimum period during the first year but continues to remain employed for the minimum period in subsequent year."

Commenting on these budget proposals, Bharatiya Mazdoor Sangh Zonal Secretary Pawan Kumar said, "This budget is a total disappointment. The proposal to reduce women’s EPF contribution to 8 per cent from existing 12 per cent of wages would be possible only after the amendment in the Employees’ Provident Fund and Miscellaneous Provisions Act."

He further said that the government had earlier decided to make provident fund contributions optional for employees in apparel and made-ups sector under a policy but it could not be implemented because the Act was not amended for the purpose.

Similarly, he said that the proposal to reduce women’s EPF contribution would require an amendment in the Act and seems more like populist announcement in view Lok Sabha polls due next year.

Under the social security scheme run by the EPFO, the employees contributes 12 per cent of their basic wages which goes into their Empoloyees’ Provident Fund account.

Employers also makes a matching contribution of 12.5 per cent out of which 8.33 per cent goes into Employees Pension Scheme and 3.67 per cent is deposited into employees’ EPF account. The employer also pays 0.5 per cent of basic wages towards Employees’ Deposit Linked Insurance Scheme.


courtesy:DHNS


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