Is It Legal to Change EPF Deductions for Salaries Over Rs. 15,000 in Bangalore?

As per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the EPF wage limit is set at Rs. 15,000. However, the Act specifies that the wage for EPF calculation includes basic pay, dearness allowance (DA), and retaining allowance, if any. HRA is not considered for EPF calculation.

Given your scenario where you plan to deduct EPF for all employees up to Rs. 15,000 salary (excluding HRA) from 1st April 2022, this approach aligns with the legal provisions. Employees with a salary exceeding Rs. 15,000 (excluding HRA) will not be eligible for EPF deductions as per your new policy.

To implement this change effectively, ensure clear communication to all employees regarding the revised EPF deduction criteria. Update the payroll system to reflect the new EPF deduction structure accurately from the specified date. It's crucial to maintain compliance with the EPF regulations and accurately calculate contributions based on the revised wage limit.

Consult with your legal team or labor law experts to ensure full compliance with the EPF regulations and any specific guidelines applicable in Bangalore, India. Regularly review and update your policies to align with any changes in labor laws or regulations to avoid any non-compliance issues.