By Admin 
PF Salary Limit: There are crores of PF account holders in the country. Now a big good news has come for such employees. The government is preparing to increase the salary limit under the Employees Provident Fund Organization i.e. EPFO. Currently the maximum salary limit for PF contribution is Rs 15000. Which was decided in September 2014. But now the idea is going on to increase this limit from Rs 25000 to Rs 30000.
This simply means that a large amount of even the employees getting higher salaries will come under the purview of PF. According to the report, this step can be taken with the aim of increasing inflation, change in salary structure and strengthening social security. If this change is implemented. So this will affect the savings, pension and take home salary of crores of employed people.
What will be the benefit of increasing the salary limit?
If the salary limit of PF becomes Rs 25000 or Rs 30000, then the biggest benefit will be on retirement savings. At present, the PF of employees who earn more than Rs 15,000 is calculated on a limited amount. When the new limit is implemented, more basic salary will be added to PF. Due to which the amount deposited every month will increase. Its direct effect will be that the fund received at the time of retirement will be much larger. Due to this the pension amount can also increase.
Because pension calculation is linked to PF structure. Apart from this, the interest received on PF is considered safe from tax to a great extent, hence it becomes a strong saving in the long run. The government believes that this will strengthen the social security of the employees and they will get more financial support for the future. It will especially benefit those private sector employees who do not have any other option other than PF for retirement.
Will there be benefit or loss?
Increasing the salary limit also means that the take home salary of employees may decrease. Because the contribution of both the employee and the company in PF will increase. For example, if your basic salary is Rs 30000. So the amount deducted every month at the rate of 12 percent will be much higher than at present. This will reduce the salary in hand. Which can create immediate pressure for many people. Especially young employees, who have more responsibilities.
They may find this change overwhelming. The burden on companies will also increase. Because they will also have to contribute more. Some experts believe that this may affect new recruitments and salary structure. Therefore if the government takes this step. So employees will have to re-look at their financial planning. So that a balance can be created between increased PF contribution and decreasing take home salary.
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