The Employees' Provident Fund Organization through the Ministry of Labour & Employment has issued a notification to enhance the statutory wage ceiling for coverage of an employee.
Effective from September 1, 2014, the wage ceiling has been raised from existing Rs. 6,500 to Rs. 15,000 per month while the minimum monthly pension for EPFO schemes has been fixed to a minimum Rs.1,000/- per month. Now, in case of the death of an EPFO subscriber, his/her family will be entitled to maximum sum assured of Rs. 3.6 lakh instead of existing Rs. 1.56 lakh.
Further, an additional 20% relief on the amount of assurance benefit admissible under the EDLI Scheme, 1976 has been declared.
Please note that the existing members as on the 1st of September 2014 who has been contributing on the salary exceeding Rs. 6,500/- may on a fresh option ( to be exercised jointly by employer and employee) continue to contribute on the salary exceeding Rs.15,000/-. This fresh option shall be exercised by the member within 6 months.
For Instance: Assume that the basic salary of employee "X" is Rs.20,000/-. As per statutory regulations, he is exempted from payment of contribution towards EPFO; however he has the choice of voluntary contribution. Thus the amount of contribution as per the amendment will be calculated as follows:
| Statutory Contribution (Rs.) | Voluntary Contribution (Rs.) |
| Before Amendment | ||
| Contribution by Employer | 6,500 * 12% | 20,000 * 12% |
| Contribution by Employee | 6,500 * 12% | 20,000 * 12% |
|
| After Amendment | |
| Contribution by Employer | 15,000 * 12% | 5,000 * 12% (20,000- 15,000) |
| Contribution by Employee | 15,000 * 12% | 5,000 * 12% (20,000- 15,000) |
Further, the aforesaid mentioned employee X will to have pay an additional contribution at the rate of 1.16% per month on the salary exceeding 15,000/- (i.e. in this case on the amount Rs.5,000/-) .
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CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES
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