This one is for salaried people.

Assuming I have a basic salary of 30000, with today’s announcement my PF contribution is set to reduce by 2% for next three months. What does that mean?

1/6

It would mean a reduction of PF by 600Rs for next three months each in order to increase liquidity in my hand.

(Sounds interesting? continue reading)

2/6

Now that would mean my employer would also not be needed to contribute 2% for next three months. So now unless my employer increases my CTC or decides to voluntarily contribute that 600 as well to my take home.

3/6

I lose on that 600 which would have gone to my EPF corpus for next three months and also the interest that it would have accrued over the years...

4/6

Now even on 600 which I am getting now in hand falls under my taxable bracket and taxing this additional amount at 20% I end up further giving away 120 from that and left with 480 for my additional liquidity against years of that small amount accruing compounded interest

5/6

Unless the salaried class gets some additional benefits in the next few days of announcement.

Also let me know if you want the amount by which your retirement fund will decrease because of this decision.
(Comment below asking for it)
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So much so for being “aatmanirbhar

6/6