EPFO: The government is considering increasing the limit of contribution made by subscribers to the Employees’ Provident Fund Organization (EPFO) and Employees’ Pension Scheme (EPS). According to media reports, Union Labor Minister Mansukh Mandaviya has indicated this. If this happens, employees can get Rs 1 crore on retirement
EPFO: The government is considering increasing the limit of contribution made by subscribers to the Employees’ Provident Fund Organization (EPFO) and Employees’ Pension Scheme (EPS). According to media reports, Union Labor Minister Mansukh Mandaviya has indicated this. If this happens, employees can get Rs 1 crore on retirement.
Part of EPF current contribution
Right now, if the employee’s salary is ₹ 15,000 monthly or less, then both the employee and the employer contribute 12% of their salary. The employer’s contribution is divided into two parts—8.33% goes to the Employees’ Pension Scheme (EPS), while the remaining 3.67% is deposited in the Provident Fund (EPF). For example, if the salary is ₹15,000 monthly, then the employee’s contribution to the provident fund will be ₹1,800, while the employer’s contribution to the provident fund will be ₹550.50 and to the pension scheme will be ₹1,249.50.
What will be the new EPFO contribution limit?
The government is considering increasing this salary limit to ₹ 21,000. If this proposal is passed, then on a salary of ₹ 21,000, the employee’s contribution will be ₹ 2,520 and the employer’s contribution will be ₹ 770.70 in EPF and ₹ 1,749.30 in EPS.
Employees will get big benefits
If the EPFO limit is increased to ₹ 21,000, then a 23-year-old employee, who contributes for 35 years, his total amount can reach ₹ 1 crore. At the current limit of ₹ 15,000, this amount is ₹ 71.55 lakh, in which the total contribution is ₹ 10.71 lakh and the interest is ₹ 60.84 lakh. Whereas on the limit of ₹21,000, the total contribution will be ₹15 lakh and interest will be ₹85 lakh, which can give an extra ₹28.45 lakh.
Limit for withdrawing money from EPFO
The withdrawal limit of EPFO has also been increased to ₹1 lakh, which was earlier ₹50,000. This limit has been increased especially when there is an urgent need of money in a family emergency.
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