If you are an EPF (Employees Provident Fund) account holder, a good news is coming out for you. The government is going to make a big change in the rules related to EPFO (Employees’ Provident Fund Organization) soon. The special thing is that this change can happen with the wage limit i.e. salary limit. This new change will increase the retirement funds of the employees, as well as the pension received from EPS (Employees’ Pension Scheme).
🔁 What is the current rule right now?
At present, all the employees whose basic salary and DA are ₹ 15,000 per month or less under the EPFO. From the salary of these employees:
Employee contribution: 12%
Employer’s contribution: 12%
Out of which 8.33% of the contribution of the employer goes to EPS (Pension Scheme). But its maximum contribution is limited to ₹ 1,250.
According to this rule, if someone’s basic salary is ₹ 15,000, then the employer contributes ₹ 1,250 to the EPS.
🆕 What can be a new change?
According to media reports, the government is now preparing to increase this veg limit from ₹ 15,000 to ₹ 21,000 per month. If this change is applicable, then crores of employees will get direct benefit.
Contribution to EPS can increase to ₹ 1,749
Monthly pension will increase after retirement
EPF account will deposit more money every month
💰 How will contribute to EPF and EPS?
Let us understand it from an example:
Suppose an employee’s basic salary is ₹ 21,000:
12% employee contribution = ₹ 2,520
12% employer’s contribution = ₹ 2,520
Out of this, 8.33% i.e. ₹ 1,749 will go to EPS (Pension Scheme)
The rest in ₹ 771 EPF
Earlier this figure was limited to ₹ 1,250. That is, now ₹ 499 will be more in EPS.
📉 Will your in-hand salary be low?
This change will definitely have a small impact on your net in-hand salary. Because:
EPF cut will increase
That is, more money will go to PF account than your salary
But this money will be a long -term safe investment for you
This will strengthen the retirement fund and will also get more pension
Therefore, this change is beneficial for the employees in long term.
📅 When will this change apply?
At present, no official notification has been issued by the government or EPFO. But according to sources, this proposal is under serious consideration and soon it can be approved by the cabinet.
Labor unions and pensioners had been demanding for a long time to increase the veg limit as the limit of ₹ 15,000 has been applicable for the last several years and now it is considered insufficient according to the time.
🎯 Why is the change in wedge limit important?
The limit of ₹ 15,000 has now reduced due to increase in inflation
Due to this, most employees were not getting the full benefit of EPF and EPS.
Employees will come to its umbrella due to the implementation of the limit of ₹ 21,000
It will be easy for the future to make a safe retirement plan
The benefit of government schemes will reach more category
✅ conclusion
If the government increases the veg limit from ₹ 15,000 to ₹ 21,000, it will be a big relief for the employees. Even though it puts a slight cut in their salary, but the benefits of retirement will be huge. This change will not only deposit more money in the EPF, but will also increase the pension amount due to the increased contribution to EPS. This can prove to be a visionary decision that will provide financial security to millions of employees of the country.
