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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

Scholars: Don’t poke Aurangzeb’s spirit now

Quaid Najmi
Mar 19, 2025
3 min read

Updated: Mar 20, 2025

Chhatrapati Sambhajinagar

Mumbai: Days after his 318th death anniversary, the ghost of the Mughal Emperor Aurangzeb has suddenly come to haunt Maharashtra politics with hideous cries to uproot his remains from the final resting place in Chhatrapati Sambhajinagar (ex-Aurangabad).


The state has witnessed many spirited protests and agitations by right-wingers, besides clashes in Nagpur, seeking to raze the nondescript and unmarked grave of Aurangzeb.


It is a stark contrast to his mother Mumtaz Mahal’s magnificent and famous Taj Mahal in Agra – a legacy of his father Emperor Shah Jahan to the world.

Several intellectuals from different communities are pained over the clamour to erase Aurangzeb’s grave in Khuldabad, where he died at the age of 88 (Nov. 3, 1618-March 3, 1707), and caution that it may bode ill in the coming times.


Personalities like intellectual Dr. Ram Puniyani, academic and Mumbai’s N.M. College retired Principal Dr. Urmila Rai, Marathi satirist Saby Pereira, corporate legal eagle Faranaaz Karbhari or Muslim academic Maulana M. Burhanuddin Qasmi have frowned at the goings-on which they are observing closely, in their interactions with The Perfect Voice.


They almost unanimously feel the government should not be seen ‘bowing down’ before lumpen elements from extremist groups for earning short-term political brownies fraught with long-term perils.


Dr. Ram Puniyani:

“Razing a historical monument or other such structures will not erase history. We must understand that whatever Aurangzeb did was more as an Emperor/Alamgir I.

The palace politics of that era was evil and brutal,” said Dr. Puniyani, writer-intellectual and an ex-medico with the IIT-Bombay.

He cited multiple instances of royal families in the past indulging in bloody coups, not sparing parents, brothers-sisters, progeny, etc. in their crazed lust for power or political compulsions; most recently the Nepal palace massacre of June 2001 when the entire Royal House of Gorkha dynasty was annihilated in a family feud.


Saby Pereira:

“Let the grave lie as it is. Till now it was ignored and probably should have been that way. Rather than demolish it, I suggest it should be rebuilt and beautifully decorated as a Monument to Marathas Victory over the Mughals,” said Pereira, eminent Marathi humorist.

Justifying his contentions, Pereira said that Aurangzeb, the longest reigning Mughal Emperor and also over the largest territory in the sub-continent and beyond, failed to vanquish the Marathas, and hence the grave should be converted into ‘a symbol and pride of Maratha history’.


Dr. Urmila Rai:

Academician and retired Principal of N.M. College, Vile Parle, Dr. Rai said she is “firmly opposed to causing any harm to the grave, saying destroying a piece of centuries-old history will not benefit the country today even a bit”.

“On the contrary, it will give rise to other poisons, hatred and enmity between communities coexisting peacefully for centuries. Those wanting to raze the Aurangzeb grave must first clarify whether it will solve modern day problems like inflation, unemployment, atrocities on women, etc,” Dr. Rai asserted.


Adv. Faranaaz Karbhari:

Corporate legal advisor Karbhari opined that whether to bury Aurangzeb’s grave or not would depend on how the modern society chooses to engage with its history.


She said that though it is valid to critique his reign and the damage it may have caused, destruction of his grave may not be the best solution today.

“Preservation, paired with education about his reign and its impact, offers a path that acknowledges historical complexity while promoting an inclusive, reflective approach to India’s past,” averred Adv. Karbhari.


Maulana M. Burhanuddin Qasmi:

Director of Markazul Maarif Education and Research Centre, Maulana Qasmi instantly red-flagged the very idea of tearing down any structure of historical relevance for political purposes, particularly since it can’t help resolve any modern issues.


“Sit, talk and sort out things. The Khuldabad grave is a part of India’s rich and vibrant history which must be preserved. Tomorrow, other demands may crop up like bulldozing the Taj Mahal or even the Haji Ali Dargah in Mumbai. There will be no end to the dark tunnel once you enter it,” said a grim Maulana Qasmi.


“There is no need to ‘punish’ those people now for their purported black or bloody deeds/crimes committed centuries or millennia ago, it will neither serve any purpose nor wipe out the history linked with it,” concluded

Dr. Puniyani.

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