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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

Selective Outrage

May 9, 2025
2 min read

India’s left-liberal media has long prided itself on being the torchbearer of secularism, dissent and moral rectitude. In the aftermath of ‘Operation Sindoor,’ the precision military strike launched by the Modi government against Pakistan-based terror camps, it has revealed its not a principled commitment to peace or truth, but a disturbing penchant for ideological prejudice, performative sanctimony and selective outrage.


The operation itself was a textbook display of calibrated force and geopolitical prudence. Prime Minister Narendra Modi, often caricatured as ‘authoritarian’ by the ‘liberal’ English-language commentariat, chose patience over provocation. He consulted opposition leaders, held detailed discussions with defence chiefs and took key international stakeholders, notably the United States and Russia, into confidence before authorising limited military action. The symbolism of ‘Operation Sindoor’ was also carefully crafted: a pointed reminder that the attack’s real victims were Hindu women widowed by Pakistan-sponsored militants in Kashmir. The government’s briefings were also strategic and symbolic as two ranking female officers, one of them Muslim, were made the public face of the mission, underlining a new Indian confidence that blends military muscle with democratic pluralism.


But this was unacceptable for India’s entrenched ‘left-liberal’ press, steeped in academic jargon, Western validation and a knee-jerk hostility to anything remotely ‘Hindutva.’ That a Muslim officer briefed the nation on ‘Operation Sindoor’ was branded ‘tokenism’ by such commentators. Others crudely alleged that the April 22 Pahalgam massacre was the logical culmination of reported atrocities against Muslims since Modi came to power in 2014.


The semantic nitpicking over ‘Operation Sindoor’ was maddening. An editor of a prominent magazine dubbed the operation’s name as ‘patriarchal’ and coded in Hindutva tropes. In a bizarre case of moral inversion, sindoor was likened to symbols of ‘honour killings’ and gender oppression, ignoring both its cultural resonance and the cruel reality that these women had lost their husbands in cold blood. For years, India’s ‘secular’ commentariat nurtured a preordained binary: the Congress may be flawed but was at least ‘secular’ while the BJP was an inveterate ‘fascist.’ Thus, the 2002 Gujarat riots are always focused upon but the Congress-backed pogrom of the Sikhs in 1984 is either downplayed or rationalised. Terrorism in Kashmir is tragic, but state retaliation is ‘jingoism.’ A strong Muslim voice in government is ‘tokenism’ but its absence is ‘exclusion.’ Even journalistic rigour is selectively applied. When Pakistan claimed to have downed Indian jets, some Indian outlets rushed to amplify the story before verification, inadvertently echoing enemy propaganda.


Dissent is vital in any democracy. But when its becomes indistinguishable from disdain, when editorial choices are dictated by ideological conformity, then the press becomes a caricature of itself. Ironically, many of these journalists enjoy robust free speech and loudly lament India’s supposed slide into ‘fascism’ from the safety of their X handles. Yet they turn a blind eye to Putin’s repression, Erdogan’s purges or Xi Jinping’s camps. In their eyes, Modi remains the greatest threat to democracy even as they broadcast their outrage freely, without fear of censorship or reprisal. ‘Operation Sindoor’ was a statement of cultural self-confidence. That confidence has rattled those who have spent their careers gatekeeping Indian discourse. Today, their monopoly is over. The people are watching and they no longer believe that the emperor has clothes.

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