- Date : 24/03/2020
- Read: 2 mins
Government has relaxed rules regarding PF contributions; is working on a comprehensive relief package, considering the financial impact of the global pandemic on businesses
The Coronavirus health crisis has had a massive impact on the global economy and India is yet to brace for the worst. The Central and State Governments have announced a complete lock-down in as many as 75 districts across the country with the aim to contain the spread of the deadly Covid-19.
What does this mean?
All non-essential businesses including factories, manufacturing units, and offices will remain shut till March 31, 2020, as per the initial directive. The State governments may further extend the lock-down depending on their assessment of the situation. This will have a major impact on the livelihood of millions of people.
What is the recourse?
So as to minimise the financial blow, the Labour Ministry is designing a comprehensive relief package for Provident Fund subscribers. This includes:
- Doubling the minimum pension amount to Rs 2,000 to support the workforce from the lower-income group.
- Prioritising Provident Fund withdrawals for those wanting to cover for hospitalisation or loss of income on account of job loss or closure of establishment.
There is a relief for employers too. The late deposit penalty on provident fund contributions has been waived off. As per current regulations, employers are liable to pay interest at the rate of 12% per annum for every additional day there is a delay in Employee Provident Fund deposits. The penalty increases when the delay exceeds two months and six months.
With businesses not generating income for the foreseeable future, this waiver could come as a relief to employers. Here are some alternative sources of income if you don’t have a pension.