PF Benefits For More People EPFO To Increase Wage Limit Soon
Hyderabad: The Central Government is considering an EPFO wage limit increase to expand provident fund coverage for salaried employees across India.
According to reports, the proposal aims to strengthen social security for workers who currently receive limited or no EPF benefits. If approved, the EPFO wage limit increase could bring many mid income earners under mandatory coverage.
At present, EPF applies only to employees earning up to ₹15,000 in basic pay and dearness allowance. This ceiling was last revised in September 2014. However, salaries and living costs have risen sharply since then.
Because of this gap, many workers remain outside the EPF net despite stable employment. Therefore, the government is reviewing a higher wage ceiling, which may be raised to ₹30,000 per month.
Private sector employees are expected to benefit the most from the EPFO wage limit increase. This includes workers in MSMEs and service based industries. As a result, a wider section of the workforce may gain long term financial security.
EPFO wage limit increase and worker benefits
If implemented, the EPFO wage limit increase will raise monthly contributions from both employees and employers. Consequently, this will help workers build a larger retirement corpus over time.
Employees covered under EPF also qualify for the Employees Pension Scheme. Therefore, pension benefits are expected to improve for newly covered members. In addition, EPF contributions continue to offer tax benefits under existing income tax rules.
Under current EPF norms, members can withdraw funds for housing, education, medical needs, and other approved purposes. Hence, expanded coverage will improve access to emergency savings.
Employers will need to contribute more following the EPFO wage limit increase. Although this may raise short term costs, experts believe workforce stability will improve. Moreover, higher social security often supports better employee retention.
Meanwhile, the government plans consultations with trade unions and industry bodies. After reviewing stakeholder feedback, a final decision is expected.
If cleared, the EPFO wage limit increase could mark a key step in updating India’s social security framework for a changing economy.
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