Good news for employees! The Modi government is considering increasing the monthly salary limit for employees eligible to join the Employees’ Provident Fund (EPF) scheme. Currently, the salary cap for joining the EPF is ₹15,000 per month. However, the government is looking to raise this limit to ₹30,000.
Key Details of the Proposal:
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Salary Cap Increase:
- The government is planning to double the salary limit from ₹15,000 to ₹30,000, which would allow more employees to benefit from the EPF scheme.
- The decision is expected to be finalized by February, with most members of the Central Board of Trustees (CBT) and the Ministry of Labor in support of the idea.
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Matching Salary Cap for ESIC:
- The proposal also aims to align the salary cap for the Employee State Insurance Corporation (ESIC) with that of the EPF, potentially raising the ESIC salary cap to ₹30,000 as well.
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Impact on Employee Contributions:
- With the EPF contribution rate currently at 12% from both employees and employers, employees earning up to ₹30,000 will have to contribute ₹3,600 per month to the EPF scheme.
- This will result in higher contributions, leading to a larger EPF balance and a better pension for employees when they retire.
Benefits for Employees:
- Bigger Lump Sum: Employees can expect a larger retirement corpus, as both their and their employer's contributions will increase.
- Better Pension: The increase in contributions will also improve pension benefits in the long run.
This move is seen as a step toward improving the social security system and ensuring better retirement benefits for employees. The decision is still pending, but if approved, it will have a significant positive impact on the financial security of millions of workers.
