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Self-employed may be brought under EPFO's social security net
The government is looking to allow self-employed people to enrol under the Employees' Provident Fund Organisation by contributing 10% of their income to the provident fund body every month.
"The proposal, being deliberated upon by the ad-hoc committee on EPFO expansion, is expected to benefit 15 million self-employed people in the country," a person familiar with the deliberations told ET.
The decision on the proposal will be taken by the central board of trustees of EPFO.
The rate of contribution, however, could be subject to an income ceiling. Under the existing EPFO scheme, wages for the computation of provident fund and pension are subject to a ceiling of ₹15,000 per month.
Also, the contributions made by the self-employed may not be part of the corpus built over several decades through employee-employer contribution under the existing Act.
Even the returns on such deposits from individuals or the self-employed may vary from the returns on EP ..
The Social Security Code empowers the government to frame a new scheme to provide social security to an unorganised worker, including the self-employed, and shall entrust the administration of such scheme to the EPFO.
However, if the implementation of the Code is delayed, the government may even consider tweaking the EPF Act, 1952, which mandates an employee-employer relationship wherein both employee and the employer contribute 12% each to the provident fund account of the beneficiary
Team Edu-Visor