Union Budget 2015-16: Proposal to amend regulation on PF, ESIS
28 Feb 2015
Presenting his first full year Budget, finance minister Arun Jaitley said employees need to be provided two options with respect to the Employees Provident Fund (EPF).
''Firstly, the employee may opt for EPF or the New Pension Scheme (NPS). Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer's contribution,'' Jaitley said.
With respect to ESIS, he said the employee would have the option of choosing either ESI or a Health Insurance product, recognised by the Insurance Regulatory Development Authority.
''We intend to bring amending legislation in this regard, after stakeholder consultation,'' Jaitley added.
This move will actually contribute to formal job creation, say experts.
Currently, in a cost-to-company model, informal employees can take home their entire salary while employees in the organised sector lose a part of their earnings to schemes like PF, ESI, Professional Tax, Employees Pension Scheme, statutory bonus and gratuity.
However, there is a proposal to apply 10 per cent TDS on provident fund. But, according to experts TDS is applicable only for EPF Trust. It does not seem to be applicable for PPF.
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