Hello Everyone, I have a query regarding ESI Contribution rates. According to the 2019 notification, ESI Contribution rates were reduced to 4% (3.25 for Employer & 0.75 for Worker). The notification amended a specific section 51 of the ESIC Act.
Query on ESI Contribution Rates for New Areas
My query pertains to one of our establishments being notified as a "New Area" under ESIC in January 2019 and another being notified as "New Area" in August 2020. Will these areas attract the reduced contribution rates of (3.25 & 0.75) or continue to attract the existing rates (3 & 1) as per the 2016 ESIC Notification? Please help.
From India, Bangalore
Acknowledge(0)
Amend(0)
Query on ESI Contribution Rates for New Areas
My query pertains to one of our establishments being notified as a "New Area" under ESIC in January 2019 and another being notified as "New Area" in August 2020. Will these areas attract the reduced contribution rates of (3.25 & 0.75) or continue to attract the existing rates (3 & 1) as per the 2016 ESIC Notification? Please help.
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Prakhar Pandey, ESIC contribution rate for the newly implemented area of 1% employees' share and 3% employers' share under Rule 51-B stands terminated from 01 Aug 2018 by ESI Corporation.
Effective ESI Contribution Rates from 2019
Effective from 01.07.2019 onwards, rates of ESI contribution have been reduced to 0.75% employee share and 3.25% employer share.
From India, Mumbai
Acknowledge(0)Amend(0)
191Effective ESI Contribution Rates from 2019
Effective from 01.07.2019 onwards, rates of ESI contribution have been reduced to 0.75% employee share and 3.25% employer share.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Prakhar Pandey, PFA:
1. Gazette notification dated 06.10.2016 pertaining to the reduction of ESI contribution rates in the newly implemented area; and
2. Circular dated 13.02.2017 giving clarification on the reduction of ESI contribution rates in the newly implemented area.
These reduced rates were applicable for 2 years up to 06.10.2018. This clarification is given in the said circular dated 13.02.2017.
From India, Mumbai
Acknowledge(0)Amend(0)
1. Gazette notification dated 06.10.2016 pertaining to the reduction of ESI contribution rates in the newly implemented area; and
2. Circular dated 13.02.2017 giving clarification on the reduction of ESI contribution rates in the newly implemented area.
These reduced rates were applicable for 2 years up to 06.10.2018. This clarification is given in the said circular dated 13.02.2017.
From India, Mumbai
Acknowledge(0)Amend(0)
Thank you, sir. As much as I can understand from the 2017 clarification, New Area rates are applicable with effect from 06.10.2016 for a period of 2 years. That means up to 05.10.2018 only. So even if any establishment gets notified as a New Area on 01.01.2018, it will get the benefit of reduced rates (as per 2016) only until 05.10.2018 and not for 2 years starting from 01.01.2018.
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
ESIC New Area Reduced Rate Of Contribution 6 Oct 2016.pdf