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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

Missing Link Set to Redefine Mumbai 3.0

Writer: Bhalchandra Chorghade
Bhalchandra Chorghade
Apr 29
3 min read

Mumbai: The long-awaited Missing Link project on the Mumbai–Pune Expressway is emerging as a pivotal infrastructure intervention that could significantly reshape the real estate dynamics of the extended Mumbai Metropolitan Region (MMR). By bypassing the challenging ghat section and reducing travel time between Mumbai and Pune by an estimated 20–25 minutes, the project is expected to unlock new development corridors and accelerate the evolution of what industry stakeholders are calling “Mumbai 3.0.”


This emerging geography, comprising peripheral growth zones beyond established nodes such as Navi Mumbai and Panvel, is increasingly drawing attention from both developers and homebuyers. Locations like Karjat, Neral, Khopoli and Lonavala are witnessing renewed interest, driven by improved connectivity, relatively affordable land parcels and a growing preference for low-density, lifestyle-oriented living.


By easing congestion on one of the country’s busiest expressways and improving accessibility to hinterland locations, the project is creating conditions conducive to new micro-market formation. Analysts note that such infrastructure-led expansion is critical at a time when Mumbai’s core real estate markets are approaching saturation.


In particular, Karjat and surrounding areas are seeing increased traction in plotted developments, villa communities and wellness-focused second homes. These formats cater to evolving buyer preferences shaped by hybrid work models and a heightened focus on quality of life. Improved last-mile connectivity and civic infrastructure are further strengthening the case for these locations as both weekend retreats and long-term residential options.


Unnati Varma, Director, ORA Land (ORA Group), said, “The Missing Link project is a landmark development that will redefine accessibility to emerging destinations like Karjat and surroundings. As travel time reduces and connectivity improves, we anticipate a significant uptick in demand for plotted developments and lifestyle-driven housing. Today’s homebuyers are seeking a balance between connectivity and quality of life, and locations like Karjat offer exactly that. This infrastructure boost will further position these regions as viable extensions of Mumbai’s residential landscape.”


The broader narrative of Mumbai 3.0 is also being shaped by other large-scale infrastructure initiatives, including the Mumbai Trans Harbour Link and the upcoming Navi Mumbai International Airport. Together with the Missing Link, these projects are expected to redistribute real estate demand more evenly across the metropolitan region, reducing pressure on traditional urban centres while fostering the rise of new growth clusters.


From an industry standpoint, the project’s impact extends beyond residential demand. Kamlesh Thakur, President, NAREDCO Maharashtra, said, “The Missing Link is a transformational infrastructure milestone that will redefine connectivity between Mumbai and Pune while opening new high-potential growth corridors across the region. By significantly reducing travel time and improving mobility, this project is expected to accelerate demand for emerging destinations within the Mumbai 3.0 growth belt.”


Market observers believe that relatively lower entry prices, coupled with rising lifestyle aspirations, will continue to drive demand in these emerging corridors. As infrastructure projects near completion, the Missing Link stands out as a critical catalyst—not just bridging distances, but enabling a more distributed, sustainable model of urban expansion for the MMR.


Missing Link opens with phased traffic rules

The Missing Link project on the Yashwantrao Chavan Mumbai-Pune Expressway, a landmark infrastructure initiative by the Maharashtra State Road Development Corporation (MSRDC), significantly cuts travel time between Mumbai and Pune, eases congestion on the existing route and boosts regional connectivity for millions of daily commuters and the economy. Maharashtra's Additional Director General of Police (Traffic), Praveen Salunke, has issued a notification regulating traffic on this crucial 13-km stretch, set to open for public use from May 1, 2026. The rules prioritize tunnel safety after stakeholder consultations, ensuring a secure rollout for this game-changing highway upgrade.


Phased Rollout

In Phase I, from May 1 to October 31, 2026, only Light Motor Vehicles (LMVs) and passenger buses will be permitted, while goods-carrying vehicles remain prohibited. Phase II, starting November 1, 2026, will continue allowing LMVs and passenger buses, with a review after six months to assess permitting goods vehicles. The notification invokes Section 112 of the Motor Vehicles Act, 1988 and related government orders for enforcement.


Safety Measures

Vehicles carrying hazardous materials (Hazmat), inflammables or explosives are permanently banned from the Missing Link tunnels and must use the existing expressway, per Ministry of Road Transport and Highways (MoRTH) guidelines. Speed limits are capped at 100 kmph for cars (LMVs) and 80 kmph for passenger buses, with a tolerance for minor exceedances under Section 183. Authorities including MSRDC and police have been directed to install signage and publicize the rules via newspapers, TV and social media.


As the missing link opens to traffic, authorities are hopeful that it will not only enhance commuter experience but also boost economic activity between Mumbai and Pune. With improved travel efficiency and unchanged toll rates, the project is poised to deliver both convenience and value to the public. The coming weeks will reveal the full impact of this long-anticipated upgrade, but for now, commuters can look forward to a faster and safer journey, without paying extra for it.

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