At the New Year, the Employees Provident Fund Organization (EPFO) has made amendments in some major rules, which should considerably impact the salary class employees in India. It is essential for every employee to note these changes pertaining to pensions, PF contribution and withdrawal.
New Limit On Contribution To EPF
Considering PF contribution in 2025, EPFO has raised the ceiling on PF contributions. Twelve percent contributions of employees would be applicable on salary up to Rs 21,000. Earlier the ceiling was Rs 15,000. This means thatemployees earning higher salaries will now collect comparatively higher accumulation through PF benefits. There is also a voluntary contribution(no upper limit).
Enhancements In Pension Scheme
The Employee Pension Scheme has seen a positive change in its arena. The value of minimum pension has raised drastically from just 1,000 to 2,500 in a month. The minimum service required for a pension is below the earlier threshold; that is, it is now 5 years instead of 10 years. Besides these, the deduction rate has also been relaxed for taking the pension before 58 years.
Change In Terms Of Withdrawal
Rules regarding withdrawal have become stricter. The only case in which EPF emergency withdrawal is allowed is if the account is linked to Aadhaar. The tax exemption limit on lump sum withdrawal has been redefined. Under the current rule, there will no longer be TDS if the withdrawal does not exceed Rs 5 lakh. In contrast, the previous limit was set as low as Rs 50,000.
Online Facilities Enlargement
EPFO has further digitalized its facilities. For example, members may now access all of its services through its new unified portal. Claim settlement time has been reduced to 3 days. Linking of UAN with Aadhaar is now made compulsory, which will eliminate frauds.
What Should Employees Do?
All employees should link such UANs to Aadhaar. They need to regularly check their EPF passbooks and report any discrepancies to EPFO immediately. By contributing more under these new rules, you make your retirement plan stronger. You would be able to make better decisions for your future by understanding these changes.
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