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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

Gadkari to move HC on E-20 slur

Quaid Najmi
Jul 27
3 min read

Seeks Rs 11 crore damages

Mumbai: In a pre-emptive legal move, Union Minister for Road Transport and Highways Nitin Gadkari has approached the Bombay High Court seeking permission to institute a civil defamation suit against the circulation of allegedly defamatory and deepfake content linking him to the Ethanol-Petrol blending programme on the Internet and social media.

 

Justice Abhay Ahuja on Monday granted Gadkari leave under Clause XII of the Letters Patent to institute the proposed suit after allowing his counsel, Sandeep S. Ladda, to satisfy the court on the issue of territorial jurisdiction and the cause of action.

 

Appearing for Gadkari, Ladda submitted that the proposed defendants include Google LLC, YouTube, Meta Platforms Inc. (Facebook and Instagram), X Corp, the Union Ministry of Electronics and Information Technology, the Department of Telecommunications, besides certain unknown creators and disseminators of the content who have been arrayed as “Ashok Kumars | John Does”.

 

Ladda argued that the allegedly defamatory and deepfake content is accessible to Internet users in Mumbai and is intended for viewing within the territorial jurisdiction of the Bombay High Court. Consequently, a substantial part of the cause of action has arisen within Mumbai, conferring jurisdiction on the High Court to entertain the proposed suit.

 

Since the same content is also accessible outside Mumbai, a part of the cause of action has arisen beyond the court's ordinary original civil jurisdiction, thereby necessitating leave under Clause XII of the Letters Patent, Ladda submitted.

 

After hearing his submissions, Justice Ahuja granted him leave to file the civil suit in which he is seeking damages of Rs 11-cr from the defendants.

 

Gadkari is now expected to institute a substantive civil suit on the Original Side of the Bombay High Court against the social media platforms and other known and unknown entities alleged to have hosted or disseminated the impugned content. The matter is likely to be placed before Justice Arif Doctor in due course.

 

Different Ministry

In the proposed plaint, Gadkari, who represents the Nagpur Lok Sabha constituency, stated that the Ethanol Blending Programme (EBP) and the E-20 fuel policy are administered by the Union Ministry of Petroleum and Natural Gas.

 

E-20 petrol, a blend of 20 pc ethanol and 80 pc petrol, is a key component of the government of India’s long-term strategy to slash crude oil imports, reduce emissions and boost the use of domestically produced biofuels.

 

However, in recent times, the E-20 policy has ignited concerns that older vehicles (manufactured pre-2023) – not designed specifically for the blended fuel - may experience compatibility issues, reduced fuel efficiency, and alleged corrosion of fuel-system components.

 

Nevertheless, some unknown persons have published posts and circulated deepfake content wrongly portraying Gadkari as personally responsible for the E-20 programme besides claiming that he and his family have allegedly benefited financially from it.

 

Rubbishing all such allegations as ‘false, malicious and grossly defamatory without an iota of truth’, Gadkari contended that the content is designed to mislead the masses that he has misused his public office for private gains, and has caused irreparable harm to his reputation and personality rights.

 

Interestingly, Gadkari clarified how his suit is not intended to muzzle fair public debate or bonafide comments, and declared that there is no bar on fair and good-faith criticism anchored on true facts and made without malice, which were not the subject of this action.

 

Gadkari’s Grouse
Among other things, MoRTH Nitin Gadkari has sought permanent and mandatory injunctions to the “defamatory content and deep fake content”, including all social media posts, tweets, reels, videos and other material that allegedly target him with profane and abusive language, falsely attribute statements to him, and deploy AI‑manipulated audio‑visuals simulating his name, image, likeness, facial features and voice without consent.
 
He asserted that all these reckless and defamatory campaigns, crossing the limits of lawful speech, has caused “grave and irreparable” injury to his reputation, goodwill, dignity and public image, besides infringing his personality and publicity rights.

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