New Delhi: The central government is going to review the circular of Employee Provident Fund Organisation (EPFO) which states that the allowances paid to employees will now be added to the basic salary on which provident fund (PF) contributions will be deducted. After the circular, it is certain that the take home salary of employees will be reduced.

Earlier, in an internal review meeting of the EPFO held in Mumbai on November 30, a circular was issued to all the EPFO offices.  Under the current law, companies till date deducts 12 percent of the salary and transfer it to EPFO for provident fund and pension schemes.

According to an official from the Ministry of Labour and Employment, the circular released by EPFO on November 30 is being reviewed again. The official further said that the employees whose monthly salary is under Rs 6,500 are going to benefit from the new circular. Explaining few cases, the official told that usually the employer breaks salaries into many parts which help in reducing its contribution in the employee’s provident fund.  


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