EPFO Update: If you are employed, this news may be significant for you. The government is planning to increase the current salary limit of the EPFO from ₹15,000 to ₹25,000 per month. If the proposal is passed, approximately 10 million employees who have previously been excluded from the PF and pension schemes will receive social security benefits. Currently, those with a basic salary of more than ₹15,000 are not considered EPF and EPS members.
Once the new limit is implemented, PF contributions will be mandatory for those earning up to ₹25,000. Both employees and employers will have to contribute 12% each. This will strengthen the retirement fund and pension. However, in-hand salaries may decrease slightly.
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Preparations to Increase the EPFO Salary Limit
The central government is planning to make significant changes for employees covered under the EPFO. However, PF and pension benefits are available only to employees whose basic salary is ₹15,000 or less. The government is now considering raising this limit to ₹25,000 per month. This decision could be made at the Central Board of Trustees meeting in December or January.
What are the current rules?
Currently, employees with a salary of ₹15,001 or more can voluntarily enroll in the EPF scheme. Companies are not required to include such employees in the PF scheme.
Learn who will benefit:
If this proposal is passed, contributions to PF and EPS will become mandatory for those with a salary of ₹25,000 or less. This change will bring approximately 1 crore new employees to the EPFO.
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PF Deduction and Contribution Process
Under EPFO rules, both employees and employers are required to contribute 12% each. The employee’s entire contribution is deposited into their PF account, while the employer’s 3.67% contribution goes to the PF and 8.33% to the pension fund (EPS).
Who will benefit and who will lose?
For information, employees earning salaries above ₹15,000 but up to ₹25,000 will now receive PF and pension benefits. This provides long-term financial security. However, in-hand salaries may decrease due to increased deductions.
