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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

Rising Hinduphobia

Mar 11, 2025
2 min read

The Hindu community in America as well as in India. The temple, operated by the Bochasanwasi Akshar Purushottam Swaminarayan Sanstha (BAPS), was defaced with anti-India graffiti, a clear act of intimidation that coincides suspiciously with an upcoming ‘Khalistan referendum’ in Los Angeles. This is not the first time such an attack has taken place. The last year alone has seen at least ten Hindu temples across the United States being vandalized reflecting a clear pattern of Hinduphobia being on the rise.


For years, radical Sikh separatist groups operating in North America, with support from elements in Pakistan, have sought to stoke communal tensions among the Indian diaspora. Yet their growing brazenness would not have been possible without an enabling ideological ecosystem in the West, where the BJP-led Indian government is routinely vilified as ‘fascist’ while violent separatists are treated as freedom fighters. The irony is glaring: Western liberals who excoriate India’s elected leadership as ‘authoritarian’ are often the first to rationalize radical extremism when it is cloaked in the language of victimhood.


Despite repeated incidents of temple desecration, the so-called ‘progressive’ narrative continues in the U.S. continues to dismiss Hinduphobia as a ‘manufactured’ issue, insisting that it pales in comparison to other forms of discrimination. Hindu advocacy groups like the Hindu American Foundation and the Coalition of Hindus of North America (CoHNA) have repeatedly raised alarms about this rising intolerance, but their concerns have largely been ignored or even mocked.


Anti-India rhetoric in American universities has surged, with academics openly pushing the idea that Hinduphobia is a myth even as they cheerlead narratives of ‘Hindu supremacy.’ Think tanks with questionable funding links churn out reports portraying the Indian government as an authoritarian menace while downplaying the rising violence against Hindus globally. In contrast, the same voices that shout ‘Islamophobia’ or ‘white supremacy’ at the slightest provocation are conspicuously silent when Hindu places of worship are attacked.


This hostility stems from an ideological disdain for the Narendra Modi-led BJP government, which, to Western progressives, embodies everything they loathe: unapologetic nationalism, economic self-reliance and a refusal to be lectured by the West. Modi’s electoral dominance has led leftist intellectuals to conflate the Hindu majority with an imagined, monolithic ‘Hindu supremacist’ movement - an absurd notion in a country as religiously and culturally diverse as India.


Much of the Western left has constructed a simplistic moral binary: groups that claim oppression must always be defended, even when their actions undermine democratic values. This warped logic has led to the legitimization of not just Khalistani separatists but also extremist elements in the Palestinian movement, who are excused even when they target civilians.


Thus, if a mosque or synagogue in the U.S. is defaced, it would trigger an outpouring of condemnation with the FBI swiftly deployed and politicians scrambling to reaffirm their commitment to religious tolerance. But when Hindu temples are targeted, the response from American political elites has regrettably been muted. This must swiftly change under the new Trump administration.

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