The statutory contributions of companies towards provident fund — one-fourth of an employee’s monthly wages — is expected to be deposited by employers within the first 15 days of every month. However, amidst the pandemic and its adverse effect on businesses, the date for contribution for the month of March (which was due by April 15), has already been extended to May 15. Now, the contribution may be deferred for the month of April too, since this has been the worst month for businesses.
The Ministry of Labour and Employment is yet to approve the proposal, which, if approved, is capable of providing about Rs 30,000-crore liquidity (considering the dues of Rs 15,000-crore each for March and April) to employers.
According to the central provident fund commissioner, a decision is likely to be taken after May 3, when lockdown is expected to be lifted or some announcement related to the same is expected to be made.
About 15 days ago, on March 28, the Government had announced that withdrawal from the Employees’ Provident Fund (EPF) will be allowed to help people survive the ongoing cash shortage due to the COVID-19 crisis. Since then, the EPF Organisation has processed 331,000 claims, and has disbursed about Rs 946.49 crore.
Subscribers of EPF are allowed to withdraw (tax-free) up to three months of salary (basic pay and dearness allowance) or 75 per cent of the balance, whichever is lower.