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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

Reliance seeks to cash in on Pak assault, retracts

PTI
May 8, 2025
3 min read

Mumbai: In a bizarre move, the Reliance Industries Ltd (RIL) and three other individuals filed applications seeking to patent or trademark the name ‘Operation Sindoor’ – under which India has taken revenge for the April 22 Pahalgam carnage that claimed 26 innocent lives.


Following a public furore, the Mukesh Ambani-headed RIL on Thursday quickly withdrew its application while blaming a junior person for erroneously and unauthorizedly filing it.


Additionally, three other individuals have also filed similar applications to claim the term ‘Operation Sindoor’ – a retired Group Captain K. S. Oberh, Alok Kothari and M. C. Agarwal – as social media users poured their outrage over the development.


“RIL has no intention of trademarking ‘Operation Sindoor’, a phrase which is now a part of the national consciousness as an evocative symbol of Indian bravery. Jio Studios, a unit of Reliance Industries, has withdrawn its trademark application, which was filed inadvertently by a junior person without authorization,” said an official Spokesperson.


He added that RIL and all its stakeholders are incredibly proud of ‘Operation Sindoor’, which is an achievement of our brave Armed Forces in India's uncompromising fight against the evil of terrorism.


“RIL stands fully in support of our Government and Armed Forces in this fight against terrorism. Our commitment to the motto of 'INDIA FIRST' remains unwavering,” said the company.


Withdraw application

The company today sent a letter to the effect, signed by an executive Rajesh Kumar S., withdrawing its application No.6994264 in Class 41 – without assigning any reasons - for trade-marking ‘Operation Sindoor’, to the Registrar of Trade Marks, Mumbai.


The four applications also figure prominently - RIL topping the list - on the Ministry of Commerce & Industry’s website, and many raised questions on social media how these came to be accepted in the first place.


Barely hours after the Armed Forces launched the ‘Operation Sindoor’, the RIL filed an application seeking to register the name for its ‘goods & services’ under Class 41 that covers entertainment and education services.


Many vent their ire on social media at the RIL, with some pointing accusing fingers at the company for allegedly attempting to cash in on the success of ‘Operation Sindoor’ that has now become a household name in barely 24 hours.


Reliance says it was filed inadvertently

In a statement, Reliance said it has no intention of "trademarking Operation Sindoor. "Jio Studios, a unit of Reliance Industries, has withdrawn its trademark application, which was filed inadvertently by a junior person without authorisation," it said.


Earlier, four applications, including one by Reliance, were filed with the Office of the Controller General of Patents, Designs & Trade Marks on Wednesday, seeking to use the phrase for entertainment-related services like audio and video content.


All four applicants filed between 10.42 am and 6.27 pm on May 7 for registration under Class 41 of the Nice Classification, which includes education and training services, film and media production, live performances and events, digital content delivery and publishing, and cultural and sporting activities.


This category is often used by OTT platforms, production houses, broadcasters, and event companies, suggesting that 'Operation Sindoor' could have become a film title, web series or documentary brand.


"The Reliance family is ready to support any measure in protecting our nation's unity and integrity. We like our fellow Indians believe – India seeks peace, but not at the cost of its pride, security or sovereignty."

Mukesh Ambani, Chairman and Managing Director, Reliance Industries

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