Wage Ceiling Limit Under EPFO: The government is considering increasing the wage ceiling limit of people covered under the Employees’ Provident Fund Organization (EPFO). This means that the minimum salary of PF account holders can now be increased from Rs 15 thousand to Rs 21 thousand. This will not only increase the contribution of salaried employees to the PF but will also increase the pension they will get after retirement because this will increase the contribution of the employees as well as the employer. The government’s objective behind doing this is to increase the social security coverage of the employees.
You will get increased pension after retirement!
Generally, 12 percent of the basic salary of the employees is deposited in EPF. The employer also contributes the same percentage of the basic salary. Out of this 12 percent, 8.33 percent is deposited in the EPS account. At present, on the wage ceiling limit of Rs 15,000, 8.33 percent of it is in the employee’s pension account i.e. EPS.
If the wage ceiling limit is increased to Rs 21 thousand, then now 8.33 percent of this amount will be deposited in EPS. This will increase the pension after retirement. Till now, where 8.33 percent of Rs 15 thousand was deposited in the EPS of Rs 1,250, now due to increase in wage ceiling limit to Rs 21 thousand, 8.33 percent of this amount i.e. Rs 1,749 will be deposited in the pension account.
The amendment was made ten years ago
With this, along with getting a lump sum amount of EPF after retirement, the EPS i.e. pension amount will also increase. Before this, the government had amended the wage ceiling limit ten years ago in 2014. At that time it was increased from Rs 6,500 to Rs 15,000. Now since people’s income has also increased along with inflation, the government should again consider its amendment. This has been demanded for a long time. If this happens, crores of employees will benefit from it.
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