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By:

Sumit Ranjan Das

21 August 2024 at 4:08:59 pm

EPFO’s Big Wage-Band Reset

Twelve years is a long time for a wage ceiling to remain unchanged. The last revision came in September 2014, when the limit was raised from Rs.6,500 to Rs.15,000. Last week, the Union Cabinet approved another increase, taking the ceiling to Rs.25,000 a month with effect from 17 September 2026. The government’s estimate is that more than 51 lakh additional employees will come within mandatory EPFO coverage as a result of the change. For employers and payroll professionals, however, the...

EPFO’s Big Wage-Band Reset

Twelve years is a long time for a wage ceiling to remain unchanged. The last revision came in September 2014, when the limit was raised from Rs.6,500 to Rs.15,000. Last week, the Union Cabinet approved another increase, taking the ceiling to Rs.25,000 a month with effect from 17 September 2026. The government’s estimate is that more than 51 lakh additional employees will come within mandatory EPFO coverage as a result of the change. For employers and payroll professionals, however, the headline number is only the starting point. The more important questions are who will be covered, which wages will be taken into account and how the revised provisions will be implemented. Wage Ceiling The existing wage ceiling of Rs.15,000 a month is being raised by Rs.10,000, or 66.7 percent, to Rs.25,000. The change takes effect from 17 September 2026 and marks the first revision since September 2014. The government expects more than 51 lakh additional employees to be covered. Estimated expenditure is about Rs.56,696 crore over five years, while annual government outgo is expected to rise to approximately Rs.11,339 crore. The standard contribution remains 12 percent each from the employee and employer, subject to applicable provisions. The Cabinet said the decision will expand access to provident-fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), in accordance with the applicable scheme provisions. The wage ceiling is not merely an administrative threshold. It determines the point at which mandatory EPF coverage applies under the existing framework. At present, a fresh employee joining employment at wages above Rs.15,000 a month is not automatically brought within mandatory EPF coverage and may remain outside mandatory provident-fund, pension and associated insurance protection, subject to applicable statutory provisions. The revised ceiling will bring a substantial section of employees earning between Rs.15,000 and Rs.25,000 within the mandatory coverage framework. The government has also quantified the fiscal impact. The estimated expenditure is about Rs.56,696 crore over five years, while annual government outgo is expected to rise to approximately Rs.11,339 crore, compared with existing annual budgetary support of about Rs.10,250 crore. The Labour Ministry has linked the revision to sustained wage growth, rising incomes and the continued expansion of formal employment since the previous revision in 2014. Payroll Illustration Consider an employee earning Rs.22,000 a month who becomes subject to mandatory coverage under the revised ceiling. At the standard 12 percent contribution rate, if the full eligible wage is used as the contribution base, the employee’s contribution would rise from Rs.1,800 to Rs.2,640 a month, while the employer’s contribution would similarly rise from Rs.1,800 to Rs.2,640. Total monthly contributions would therefore increase from Rs.3,600 to Rs.5,280 — a combined increase of Rs.1,680. However, this should not be treated simply as Rs.1,680 of additional employee savings. Contributions are allocated between EPF and EPS components as prescribed, with the EPF component accumulating in the employee’s account and the EPS component providing pension benefits subject to scheme conditions. The Rs.22,000 example is illustrative, not a universal payroll formula. The final treatment of wage components, existing employees in this band, EPS allocation and transitional matters will depend on the statutory notification and EPFO implementation instructions. For payroll professionals, the immediate task is to assess the operational impact. Key questions include the effective date for existing employees and new joiners, which wage components will count towards PF, whether the 10 percent concessional rate for notified establishments will continue, how the revised ceiling will interact with EPS pensionable wages, and what changes will be required in payroll systems. The Cabinet approval establishes the policy decision; the formal Gazette notification and EPFO instructions will determine how it is translated into payroll processes. The revised ceiling is the first increase since September 2014 and is expected to bring more than 51 lakh additional employees, particularly those in the Rs.15,000-Rs.25,000 wage band, under mandatory EPFO coverage. For them, the change can expand access to provident-fund savings, EPS pension and EDLI insurance, subject to scheme provisions. For employers, it means reviewing payroll costs, employee data, eligible wage components, contribution calculations and compliance systems. The government has described the move as part of efforts to extend statutory social security and strengthen formal employment. The policy has been announced. For payroll professionals, the next chapter is implementation. (The writer is a Cost and Management Accountant and founder of TaxoDas. Views personal

An Artist of the Ring

Apr 10
3 min read

With Preeti Pawar’s win at the recent Asian Boxing Championships in Ulaanbaatar, India’s new boxing vanguard has finally come of age.

In the hard geometry of the boxing ring, there is little room for flourish. Yet for 22-year-old Preeti Pawar, each bout seems to carry the suggestion of a canvas. At the in Ulaanbaatar, the youthful Preeti’s unanimous 5–0 dismantling of Huang Hsiao-wen, a three-time world champion and Olympic medallist, was a statement that Indian women’s boxing has entered a new, assured phase.


Pawar may well be the most intriguing protagonist of this new age. India’s women secured four gold medals at the do, topping the standings with an authority that would have seemed improbable a decade ago. While Pawar’s triumph was the headline, it was also accompanied by the success of Minakshi Hooda and the steady march of others through the draw. That the likes of Nikhat Zareen and Lovlina Borgohain exited earlier than expected only underlined the point that Indian women’s boxing is no longer a team dependent on a few stars. It is an ecosystem of talented newcomers.


Pawar’s own journey begins, fittingly, in Bhiwani in Haryana, a town that has acquired near-mythical status in Indian boxing lore. Often dubbed the “nursery of Indian boxing,” Bhiwani has produced a steady stream of fighters hardened by modest means and relentless training. Pawar, born there in 2003, did not initially seem destined for the sport. She took to boxing at 14, reluctantly at first, coaxed by her uncle, a former national medallist who recognised in her a latent discipline.


The early signs were unambiguous. A gold medal at the Open State tournament in Panipat was her first major outing, which was followed swiftly by success at the youth nationals. In a country where sporting careers are often derailed by a lack of institutional support, Pawar benefited from something rarer - an alignment towards it. Her family, with both parents having athletic backgrounds, provided encouragement while her uncle supplied technical grounding. Bhiwani’s gritty training culture did the rest.


What distinguishes Pawar, however, is not merely pedigree but temperament. In the semi-final against Aeji Im, a Paris Olympics bronze medallist, she displayed a composure that belied her age. The victory, again by a clean 5–0 margin, was built on control rather than aggression. Pawar does not overwhelm opponents but methodically disassembles them with great skill. Her footwork is economical, her punches precise, her sense of distance unusually mature. In an era where amateur boxing increasingly rewards tactical clarity over brute force, such qualities are invaluable.


Her victory over Huang in the final was, in many ways, a masterclass in this emerging style. Huang’s pedigree of world titles and Olympic hardware suggested a contest of experience versus youth. Instead, Pawar turned it into an exercise in timing. She dictated the pace, neutralised Huang’s attacks and accumulated points with clinical efficiency. What stood out was the absence of drama as Preeti made excellence look routine.


The metaphor of the artist is not incidental. Away from the ring, Pawar is known to have an interest in painting. It is tempting to draw parallels between the two pursuits: the patience required to build a composition, the discipline to refine technique, the willingness to start afresh after a flawed attempt. In both, the process matters as much as the outcome. Pawar seems to understand this instinctively.


Indian women’s boxing, for its part, has travelled a considerable distance. Once reliant on isolated breakthroughs, it now benefits from a more structured pipeline of talent. Institutional support has improved, international exposure is more frequent, and the success of pioneers has altered perceptions. Where boxing was once seen as an unlikely pursuit for young women, it is now, in pockets like Bhiwani, an aspirational pathway.


Yet challenges remain. The churn at the top, evident in the early exits of established names, can be both a strength and a vulnerability. Pawar’s task in the post-Mary Kom Indian women’s boxing era will be to convert promise into longevity, to navigate the transition from emerging talent to established contender. The Olympics, inevitably, loom as the ultimate test.


For now, though, the focus is on what has been achieved. In Ulaanbaatar, India’s women redefined expectations. At the centre of this shift stands a young boxer from Bhiwani, whose bouts resemble carefully constructed works of art. In a sport defined by impact, Preeti Pawar offers subtle precision, poise and the quiet confidence of a new Indian generation of boxers.

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