Crores of private sector employees across the country receive EPF benefits. Discussions have intensified on the possibility of a relief decision for EPF account holders in the Union Budget 2026, which is being presented on February 1. There is growing hope among employees on issues like reducing the tax burden and increasing pension.
Currently, tax is payable on the interest earned if the annual contribution of an employee to EPF exceeds Rs 2.5 lakh. If there is no employer’s share, a deduction of up to Rs 5 lakh is available. Employee unions are demanding an increase in this limit. It is heard that the Centre is considering increasing this limit to Rs 10 lakh in the budget.
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Relaxation in the five-year rule
Till now, tax exemption is available on withdrawals only if the EPF account is active for five consecutive years. But in the era of frequent job changes, this has become a burden. Hence, there is a demand to reduce this period to three years. It is heard that a positive decision may be taken in this regard in the budget.
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Possibility of increasing the minimum salary limit
The minimum salary limit of EPF is currently Rs 15,000. The demand to increase it has been a long-standing one. It is expected that this limit may be increased to Rs 21,000 in Budget 2026. If this happens, more employees will come under the EPF and EPS.
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Employees waiting for pension hike
The current minimum pension for EPF account holders is Rs 1,000. This amount has not been increased in the last 11 years. Due to the rising cost of living, employees are demanding a minimum pension of Rs 5,000. There is speculation whether this issue will be given importance in this Budget.