Understanding EPF Revised Ceiling: What to Do About Payments Made Under the Old Limit?

Hi, can anyone explain to me regarding EPF and the revised ceiling? What should be done if the payment has been made for the past 4 months based on the old ceiling?

Hi Ramyasriram, the revised EPF ceiling is effective from 1st September 2014. If you have paid based on the old ceiling, please rework it according to the revised ceiling. Any difference should be recovered and remitted in the subsequent month.

Regards,
kpn

The current ceiling for EPF is Rs. 15,000/- (Basic + DA) effective from September 2014. If you have deducted EPF based on the old ceiling limit of Rs. 6,500/-, please calculate the difference and deposit it in the arrears column.

Regards,
P. K. Sharma

The new ceiling is 15,000 (Basic + DA). You can rework the last four payments and redeposit the difference in the next Callaghan. Also, you can recover the employee contribution from the employee.

Regards,
Viplove

EDLI Coverage Increased to Rs.3,00,000 + Additional Benefit of 20%

Implemented w.e.f 1st September 2014, the enhanced EDLI increased the benefits received by the next of kin of the employee. Now, under the revised norms, the death benefit payable would be Rs.3,60,000/-.

Points to note:
• EDLI Admin Charges are linked to Basic PF Wage. With this being increased to Rs.15,000 (earlier Rs.6,500), EDLI Admin charges are also increased.
• Employers who have set up EDLI Insurance outside the EPFO (with private insurers) will now be required to increase their coverage to Rs.3,60,000. This results in a higher annual premium outflow.
• Good for the employee - The nominee would now stand to get a higher benefit. This results in an increase in the Actual C.T.C of the Employee.

No Pension Membership if Basic Salary Exceeds Rs.15,000 - Only for New Employees Joining on or After 01.09.2014

In the case of a new employee joining after 01.09.2014, and if their Basic PF Wage is equal to or exceeds Rs.15,000, they shall not be eligible to join the EPS, 1995.

Points to Note:
• No change shall be undertaken for the current or existing employees. They shall continue to be members of both EPF and EPS. EPS diversion for such employees shall be at 8.33% of the PF Wage, limited to Rs.15,000.
• Furthermore, the provision for contribution of EPS on a higher salary has also been withdrawn, hence no new requests shall be entertained.

This results in extending the EPS benefits only to those individuals whose Basic PF wage is less than Rs.15,000. No pension benefits for the rest!

International Workers Spared - No EPS from 01.09.2014

A huge amount of money from expats was getting blocked because of the contributions to EPS, which they never enjoyed or used. This time, EPFO, in line with the above notification, has made it easier for expats to reclaim their social security contributions, either to their own country or withdraw in India.

Points to Note:
• This is only applicable for IW's who join on or after 01.09.2014.
• To be eligible for no EPS, IW's Basic PF Wage should be equal to or greater than Rs.15,000.
• For existing IW's (Employees as on 31.08.2014) - No change. Their contributions shall be split to EPF and EPS as done earlier.

This is a true reprieve for the IW's.

If EPS Contributions are in Excess of Rs.15,000 - Government Shall Not Contribute!

In many companies (particularly manufacturing & capital intensive), employees had opted to contribute in excess of the 8.33% of Basic PF Wage Limit, with prior approval of the concerned RPFC. Though the facility to contribute in excess of the statutory wage limit to existing members continues, the government's contribution of 1.13% will stop!

Points to Note:
• All such members are asked to exercise a fresh request to continue contributions in excess of their Wage Limit, within 6 months' time.
• They will also have to contribute the 1.16% of the government’s share, hence the Total Contribution of such members shall be 8.33% + 1.16% in excess of Rs.15,000.

The drawback to the Employer/Company is that they should contribute to the EPFO Admin Charges for the 1.16% recovered from the employee, which can run into a sizeable sum over a few years.

Thanks.

Dear Seniors, One of our employees joined us on 01.09.2014, and his basic salary is Rs. 20,000/-. I have contributed as follows:

Contribution Details

- Basic Salary: Rs. 24,000/-
- EPF A/c-1 (12%): Rs. 2,880/-
- EPF A/c-1 (3.67%): Rs. 1,630/-
- A/c-2: Rs. 264/-
- A/c-10 (8.33% of Rs. 15,000/-): Rs. 1,250/- (limited)
- A/c-21 (0.50%): Rs. 75/-
- A/c-22 (0.01%): Rs. 1.50/-

Kindly check the calculation and revert; is it correct or incorrect? I look forward to your valuable reply.

Please give me suggestions on how to withdraw EPF without the previous employer's signature, as the previous employer is out of state. Please advise.

Regards,
Rohit

Administrative charges in Account No. 02 have been reduced from the current 1.10% to 0.85%, subject to a minimum of Rs. 500/-, and for non-functional establishments to Rs. 75/-. Similarly, in Account No. 22, minimum administrative charges have been revised to Rs. 200/-, and for non-functional establishments to Rs. 25/-.

The above revision is applicable from January 2015 onwards. A copy of the gazette notification is attached.

Regards,
Arjun Pandav

Dear Sir, as you quoted in this post on serial no. #2 - No Pension Membership if Basic Salary exceeds Rs.15,000 - Only for new employees joining on or after 01.09.2014. One of our employees joined on 05-09-2014, and his basic salary was Rs.20,000/-. My question is, will that employee be eligible for a pension? We are contributing Rs.1250/- in A/c-10. Is it right or wrong? Please reply and help me resolve this doubt.