Govt mulls Change in PF Deduction Structure
The government has come up with a proposal to make drastic changes to the PF deduction structure, which means PF will be deducted from the total salary instead of ‘basic wages’. The EPFO feels that the existing guidelines do not allow the employees to save more money and they hardly get the benefits from PF scheme.
Currently, 12 per cent of the basic salary is deducted from the employees, while the employers add another 12 per cent of the same to their PF account. It is being alleged that the employers deliberately put the basic salary at minimum so that they don’t have to pay more towards the PF.
The FICCI has opposed the move, saying it would have far more business implications and even put the investment sector in jeopardy. Once the changes are approved, the companies may shy away from implementing the PF structure in their organisations, thus depriving the employees from taking advantage of the scheme.