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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

Justice In Sight; Instrumental lawyer Dayan Krishnan to lead prosecution

PTI
Apr 10, 2025
5 min read

Advocate led accused Tahawwur Rana’s extradition process as well

A policeman outside the Air Force Station Palam, in New Delhi before landing of Tahawwur Rana. Pic: PTI
A policeman outside the Air Force Station Palam, in New Delhi before landing of Tahawwur Rana. Pic: PTI

New Delhi: Senior advocate Dayan Krishnan, who led India’s arguments for the extradition of 26/11 accused Tahawwur Rana in a US court, is set to lead the National Investigation Agency’s (NIA) prosecution in Delhi.

Rana, a close associate of 26/11 main conspirator David Coleman Headley alias Daood Gilani, a US citizen, is learnt to be on his way to India after the US Supreme Court on April 4 dismissed his review plea against his extradition to India.


Krishnan, who has been associated with the extradition proceedings since 2010, will have assistance from Special Prosecutor Narender Mann, a seasoned criminal lawyer, who has earlier represented the Central Bureau of Investigation in the Delhi High Court.


The prosecution team will also comprise advocates Sanjeevi Sheshadri and Sridhar Kale aside from the NIA counsel, it is learnt.


The turning point in the extradition case came in May 2023. Rana’s trial had begun in 2018.


“The most important decision of his extradition came on May 16, 2023, being the first judgment by the Magistrate Judge, US District Court of Central District of California,” said a source close to the extradition proceedings.


The Magistrate Court while allowing the extradition confirmed Krishnan’s opinion — he argued that Rana’s case was not of double jeopardy.

The proceedings, the source said, saw a spirited legal fight between Krishnan and another extradition veteran Paul Garlick QC, who was representing Rana.


Garlick, the source said, argued that it was a case of double jeopardy. Krishnan, on the contrary, argued that an accused’s conduct didn’t determine the circumstances but the elements of the crime.


Double jeopardy, in legal parlance, means an accused being punished twice for the same offence or crime.


The submissions of Krishnan, who represented the government of India along with the US Department of Justice, were accepted by the court.


The second crucial milestone for the Indian government came when Rana’s appeal was dismissed by a US District Judge on August 10, 2023.


Following the dismissal of his appeal, Rana moved the US Court of Appeals 9th Circuit, but was faced with another setback for his plea was rejected on August 15, 2024, the source said.


Rana, 64, a Pakistan-born Canadian national, then moved the US Supreme Court, which denied him any reprieve on January 21, 2025.


Finally, on April 4, the US Supreme Court dismissed the review plea filed by Rana as a last-ditch attempt, finally paving the way for his extradition, the source added.


Delhi court receives trial records of 26/11 attacks

New Delhi: A Delhi court has received the trial records of the 26/11 Mumbai attacks ahead of its alleged mastermind Tahawwur Hussain Rana’s arrival in India from the US, a court source said.


Rana, a key accused in the 2008 attacks, is being brought to India on a special flight on Thursday after his last-ditch attempt to evade extradition failed as the US Supreme Court justices rejected his application.


The records were received by the court of District Judge Vimal Kumar Yadav recently in pursuance of his January 28 direction to the staff of a Mumbai court to send the records.


The judge passed the order on an application moved by the National Investigation Agency in Delhi, seeking to retrieve the records from Mumbai.

The trial court records were previously sent to Mumbai due to the presence of multiple cases related to the 26/11 attacks in both cities.


Who is Narender Mann?

The Ministry of Home Affairs appointed Advocate Narender Mann as the Special Public Prosecutor for the trial against 26/11 Mumbai terror attack accused Tahawwur Hussain Rana in Delhi.


Mann, a law graduate from Delhi University in 1990, has represented the Central Bureau of Investigation (CBI) and appeared in several important cases, including attempt on life of former CJI A N Ray by Ananda Margis.

He was the Special Public Prosecutor for the CBI in the Delhi High Court between January, 2011 and April, 2019.


Mann also represented the CBI in a Medical Council scam, AICTE scam, the CWG cases, CGHS societies scam and cases under FCRA, Prevention of Corruption Act, and banking frauds. He also appeared in cases including Jain-diary Hawala case, the JMM MPs case, Bofors case, and cooperative society cases.


‘Rana will get convicted in India’

Mumbai terror attacks accused Rana will definitely get convicted in the country possibly with a death sentence for his involvement in the dastardly terrorist act, former home secretary Gopal Krishna Pillai said on Thursday.


“Rana was the person who set up the immigration office in Mumbai in which David Headley was given the job and then he got a visa to come to India. The cover for Headley was provided by Rana. So, he and Headley were very close and they knew what was happening. So that is something which his interrogation in India will bring out,” Pillai told PTI Videos.


“Rana will definitely get convicted in India and possibly (get) a death sentence or 10 years or more,” said Pillai, who took over as the home secretary barely six months after the terror strike.


BJP hails Rana extradition, claims Congress was ‘soft’ on terror

Mumbai attack accused Tahawwur Rana’s extradition reflects “new India’s” zero-tolerance resolve towards terrorism under Prime Minister Narendra Modi, the BJP said on Thursday while accusing the Congress of being soft on terror for “vote-bank politics”.


Addressing a press conference at the BJP headquarters, national spokesperson Shehzad Poonawalla said Rana’s extradition was a “big achievement” of the Modi government and its security agencies.


It is also a tribute to the security personnel who made the supreme sacrifice while fighting Pakistan-sponsored terrorists and a “big step” towards rendering justice to more than 160 people, including those from the US, Israel, France, Germany, Italy and other countries, killed in the attack, he said.


“This extradition is not an ordinary extradition. This is a reflection of new India’s resolve which Prime Minister Narendra Modi had described in 2019, saying that if anyone dared to attack India’s unity, integrity, respect and its innocent people, the new India would bring such terrorists to justice,” Poonawalla said.


The BJP spokesperson said Rana was being brought back to make him face justice due to a “sea change” in the “attitude and mindset” of the government under Modi towards terrorism and terror attacks.


“Earlier, especially between 2004-14 (when the Congress-led UPA was at the helm), there was not a single month when there was no major terror attack in some major city of India,” he said.


The erstwhile government remained a mute spectator to terror attack incidents and did not take “concrete steps” against such terrorists and the sponsors of terrorism in India, he charged without naming the Congress.


Modi govt didn’t initiate Rana’s extradition, we did: Congress

With Mumbai terror attack accused Tahawwur Rana being extradited from the US, the Congress on Thursday said the Modi government did not initiate the process, instead it benefited from the “mature, consistent and strategic diplomacy” that begun under the UPA.


Congress leader and former Home Minister P Chidambaram said the government did not secure any breakthrough to make the extradition possible, nor is it the result of any grandstanding.


Chidambaram added that it was a testament to what the Indian state can achieve when diplomacy, law enforcement and international cooperation are pursued sincerely and without any kind of chest-thumping.


“While the Modi government is rushing to take credit for this development, the truth is far from their spin,” Chidambaram said.

This extradition is the culmination of a decade-and-a-half of painstaking diplomatic, legal and intelligence efforts which were initiated, led, and sustained by the UPA government in close coordination with the United States, he added.

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