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...

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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

CDR bombshell deepens Maharashtra turmoil

Abhijit Mulye

Apr 6

3 min read

Questions over who leaked Ashok Kharat’s call data records and why

Mumbai: Activist Anjali Damania’s disclosure on Monday of alleged call detail records (CDRs) tied to controversial godman Ashok Kharat has set off a fresh political crisis in Maharashtra. The records, she said, show an “unprecedented” spike in messages and transactions from a ‘Samata’ credit society on the day before and the day Ajit Pawar died in a plane crash. Her revelations have raised urgent questions about the source of the leak, the motive behind it and whether the disclosure is part of a larger political manoeuvre or a settling of private scores.

The disclosure prompted immediate political reaction. Opposition leaders demanded clarity on how Damania obtained the records and called for a transparent probe. Some legislators questioned the legality of circulating CDRs in public. Others speculated about selective leaks and possible political engineering. A section of commentators suggested the leak could be aimed at influencing intra party dynamics within the Mahayuti alliance, while Damania insisted the list includes names of BJP ministers such as Chandrakant Patil and Ashish Shelar, arguing the disclosure is not targeted at any single camp. Notably, both Patil and Shelar are not counted as close confidants of Chief Minister Devendra Fadnavis.

CDR Leak

Several scenarios are plausible and none can be confirmed without forensic verification. One possibility is that a private investigator or data broker with informal access to telecom records passed the material to Damania. Such intermediaries sometimes obtain data through networks of former investigators or commercial channels that operate in legal grey areas.

A second possibility is an insider within the Samata society or Kharat’s circle who sought to expose suspicious financial flows.

A third scenario is a politically motivated leak from within the state apparatus or from rival political actors seeking to damage opponents or shift the narrative around the high profile death.

Finally, there is the chance that the records were compiled by an investigative source and shared with Damania to prompt official action.

Power Struggle

Questions about whether the leak is tied to power struggles within the BJP and the Mahayuti alliance have already surfaced. Some observers read the absence of many senior BJP names in the released list as suggestive of selective targeting. Others note Damania’s insistence that BJP ministers do appear, which would undercut claims of partisan bias. The truth may lie in a mix: political factions could be exploiting a criminal probe to settle intra coalition disputes, while private vendettas and financial rivalries add layers of motive. Until investigators verify the records, any attribution remains speculative.

Legal and ethical issues also loom large. CDRs are sensitive personal data. Their unauthorised circulation can violate privacy laws and compromise ongoing investigations. Forensic authentication is essential. If the material was obtained illegally, its admissibility in court could be challenged. At the same time, if the records are genuine, they may open new lines of inquiry into financial flows and communications that investigators have not yet pursued.

ED files money laundering case against Kharat

The Enforcement Directorate has registered a money laundering case against Ashok Kharat and will soon question him, officials said on Monday.

The federal agency’s Mumbai zonal office has filed an Enforcement Case Information report (ECIR) under various sections of the Prevention of Money Laundering Act, they said.

Officials said the ED has taken cognisance of multiple FIRs filed by the Maharashtra Police against Nashik-based Kharat. He, along with some other individuals linked to him, will be questioned by the ED soon, officials said.

The self-styled godman-cum-astrologer was arrested in March after a married woman accused him of raping her repeatedly over three years.

The state police have registered a total of eight FIRs against him so far.

A subsequent probe uncovered a host of crimes, including sexual assault and financial irregularities linked to land, opening of accounts in some cooperative credit societies, and other properties.