Sasi Nair
Mumbai, March 15
Employees Provident Fund (EPF) is a systematic savings plan for workers working in a company that is registered with the EPF body in India. Normally, 12 per cent of an employee’s basic pay and an equal contribution of 12 per cent from the employer gets deposited month-on-month, attracting an interest rate of 8 – 9 per cent in a year. Usually, people can withdraw this amount when they retire or for some emergencies such as medical, buying a property, marriage, education, or when they are unemployed for some time.
With the new rules of EPF coming into play from April onwards there will be a higher contribution from employer’s side towards provident fund. Due to this salary hikes may not translate into cash-in-hand for employees. Many companies in different sectors may not be giving any hikes at all and this may put additional cut in the take home salaries of the employees. Employees working in industries such as hospitality, exhibitions and trade fairs, real estate, airlines, and so on will have to bear the brunt as these sectors are yet to recover from the after effects of the global pandemic.
Market analysts opine that in traditional companies where the basic pay is around 25 per cent, the impact could be felt more.
