Minimum Salary applicable is hiked for Employee Provident Fund (EPF) Account

Good news for employees – The Employees Provident Fund Organization (EPFO) has hiked the minimum salary limit to Rs. 15,000 from Rs. 6,500. The changed rules will be applicable from 1st September 2014.

 

What it means to employees?

Suppose the basic salary of an employee is, say, Rs. 15,000. The company (employer) was obliged to calculate EPF at 12% on Rs.6500 and remit it to the PF account of the employee. Now, with the changed rules, the company has to deduct PF at 12% on Rs.15,000 (12% of the Basic Salary or Rs.15,000 whichever is lower)

So, it means your contribution towards PF will go up (your take home salary will come down) and also employer contribution will go up (additional cost to the company)  

 

For whom this change will not impact –

Suppose the company is already deducting PF on the entire basic (say Rs.15,000 or any amount paid as basic) instead of Rs.6500 for the employees, then the new rule will not have any impact.

 

Pension –

The minimum pension for EPFO subscribers has been fixed at Rs.1000 (increased from the current pension of Rs.250) while the insurance limit has also been hiked

 

Employees Deposit Linked Insurance Scheme (EDLI) –

The maximum insurance limit for provident fund subscribers has also been hiked under EDLI scheme. In case of the death of an EPFO subscriber (employee covered under EPF), their family will be entitled to maximum sum assured of Rs.3.6 lakh instead of existing Rs.1.56 lakh.

 

Click here to download the notification.

 

Read Also :  If I quit my job now how much gratuity can I get?

 

 

Please note the following changes required to be made in computation of PF contribution w.e.f01-09-2014 :

PF new

 

In case your organisation has been contributing subject to the limit of Rs.6500, all computations will now have to be made considering revised limit of Rs.15000

Further, if any employees were excluded from coverage for the reason that their salaries were beyond limit, and their salary range is from Rs.6500 – Rs.15000, such employees will have to be now compulsorily covered under PF.

Please get back in case you need any assistance from our end.

Please follow and like us:
0 0 vote
Article Rating
Share This :

About CA Prakash Chartered Accountant Bangalore

Avatar
CA Prakash is a practicing chartered accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to team@simplifiedlaws.com

Check Also

Why is documentation important?

In Hindu mythology, there is a deity named Chitragupta, who is tasked with maintaining records …

Subscribe
Notify of
5 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
chandershekhar pal
chandershekhar pal
2024 years ago

Hi Sir,

I’m chandershekhar I want to know that someone person earlier was the part of EPF deduction and now his salary hiked and he has getting 20000/-. Is this possible to get out from the EPF scheme.That person would not want to opt EPF.
whether it is possible to does not opt EPF.

Please reply

Regards

chandeshekhar

latestvideo sirius387 abdu23na4030 abdu23na98
2024 years ago

latestvideo sirius387 abdu23na40

latestvideo sirius387 abdu23na4026 abdu23na80

S Suvarna
S Suvarna
2024 years ago

Hi
We are a new Organisation and would like introduce PF to our employees. Is there any scheme to fix the PF amount limited to Rs.750/- per month, please! Could you please guide us.
Suvarna

Femina
Femina
2024 years ago

After deduction of professional tax my salary is Rs 14800, p.f. Will be applicable on this?

The basics of Contribution to Employee Provident Fund | Simplified Laws
2024 years ago

[…] Minimum Salary applicable is hiked for Employee Provident Fund (EPF) Account […]

5
0
Would love your thoughts, please comment.x
()
x