Employee Provident Fund New Rules Applicable from 1st Sept 2014
Employee Provident Fund Organization (EPFO) has amended the Employee Provident Fund (EPF) rules by inserting some major changes. These changes have been made applicable from 1st Sept 2014.
1. Employee Provident Fund contribution made mandatory for salary less than Rs.15,000
Earlier, salaried person whose monthly salary was below Rs.6,500 were covered under Employee Provident Fund scheme and mandatorily required to contribute towards Employees Provident Fund but now this salary limit has been increased from Rs.6,500 to Rs.15,000, which means now any person getting salary up to Rs.15,000 per month should get his PF deducted and deposited with the Government.
2. Minimum Monthly Pension to Rs.1,000
Under new rules, pensionable salary shall be average of 60 months last drawn salary instead of earlier rule of last 12 months average salary and the shall be determined on pro-rata basis for the pension service up to 01.09.2014, subject of a maximum of Rs. 6500/- per month and for the period thereafter Rs. 15000/- per month.
Further, minimum monthly pension will not be less than Rs.1,000 for the widow, Rs.250 for the Children and Rs. 750 for the orphans.
3. Insurance Coverage hiked to Rs.3,00,000
Earlier, each member of Employee Provident Fund scheme used to get an insurance cover of Rs.1,56,000 but now this insurance cover has been increased to Rs.3,00,000.
4. EPF contribution of Employer Increased
Previously, Employer used to contribute a fixed sum of Rs.541 towards EPS i.e. 8.33 % of Rs.6,500 but under the new rules, EPS contribution of employer has also been increased to Rs.1,250 i.e. 8.33% of Rs.15,000.
To conclude, the new rules will reduce your take home salary because the contribution will now be on increased limit of Rs.15,000 but remember the contribution made towards Employee Provident Fund is not your expense it’s your savings for your better future.