Budget 1997-98: Full Text
Employees' Provident Fund & Gratuity
- The Central Board of Trustees of the Employees'
Provident Fund (EPF) has made specific proposals to make
the EPF schemes financially more attractive. Government
has also looked at the matter from the point of view of
augmenting savings. I am happy to announce the following
- The rate of contribution in all industries and
establishments will be increased from 8.33% to
10% for both employers and employees with effect
from March 1, 1997.
- In the scheduled industries where the rate of
contribution is now 10%, the Act will be amended
to make the rate 12% for both employers and
- The requirement of keeping 20% of incremental PF
amounts in the Special Deposit Scheme (SDS) will
be withdrawn with effect from April 1, 1997 and
the Board of Trustees will be free to invest this
portion of the funds in any of the other three
kinds of permitted securities.
- In 1995, the Central government enhanced the ceiling on
the amount of gratuity payable from Rs.1 lakh to Rs.2.5
lakh for Central government employees. I am now pleased
to announce that the benefit will be extended to all
employees covered under the Payment of Gratuity Act,
1972, which will be amended for this purpose.
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