New Delhi. There is big news for more than 7 crore employees of the country who contribute to the Employees Provident Fund (EPF). The government is now considering abolishing the 12 percent limit of contribution to PF.
Its purpose is to provide more benefits to the employees on retirement. Employees who take care of more pension or fund after retirement will be given an opportunity to contribute more to PF. This will eliminate the limit of 12 percent contribution.
A senior official of the Labour Ministry said that the aim of this reform is to provide more pension and funds to the employees after retirement. Therefore, there is a consideration to abolish the limit of 12 percent contribution in the investment option. Currently, both the employer and the employee have to contribute 12-12 percent of the basic salary. The Employees Provident Fund Organization (EPFO) is now considering abolishing the limit of 12 percent in this system.
For whom will the change be made?
According to the official, the 12% limit of contribution in PF will be abolished only for employees. This will not affect employers. This system will benefit about 6.7 crore employees of the country. The government’s objective is that employees can invest as much of their income as possible in investment options, so that after retirement they get more money for living.
How much contribution does the employer make?
As per EPFO ​​rules, out of the 12% contribution made by the employer, 8.33% goes to the employee’s pension scheme account, while 3.67% is deposited in his PF account every month. Its maximum limit is Rs 15,000. Employees who have joined after September 1, 2014 can contribute only 8.33% or a maximum of Rs 15,000 to their pension fund.
Rules for employees too
EPFO ​​has also made rules for employees’ contribution. Employees who have joined service before 1 September 2014 and have chosen the joint option can contribute 8.33% to their pension fund. The government is thinking of abolishing this limit so that employees can contribute as much as they want to the pension fund. Employees will get another option that they can put as much money as they want in lump sum or pension as per their wish.
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