This news is going to caution them for employed people. Actually, the government is implementing new rules from April 2021, due to this, the salary that comes in your hand, ie ‘take home salary’, may be reduced. Actually, the government is going to implement new compensation rules, so that employees can secure more money for their future.
Explain that last year, the Central Government has enacted a new law regarding the salary and allowances of employees. It has received approval from both houses of parliament. It is now believed that the government is going to implement the notification by issuing it. This will reduce the amount of cash in the hands of employees, but their provident fund and gratuity amount will continue to increase.
The government enacted the new Labor Code and the Salary Act in 2019 last year. It has been decided that allowances cannot be more than 50 per cent of the total salary. That means basic salary should be at least 50% of the total salary of the employee. Opinions of companies have been sought on these rules. After getting the opinion, a final decision can be taken in this regard.
Now more amount as salary allowances
In the present system, the share of allowances is more and basic salary i.e. basic salary is less. For this reason, the central government is putting emphasis on saving more money for the future of employees by implementing new rules. However, the bad effect will be that the cash amount will be reduced in the hands of employees who are getting more cash. This can mess up their expenses and EMI arithmetic. The burden of PF and graduation will also increase on companies.