NEW DELHI: In an overhaul of provident fund rules for nearly eight crore active members, Employees Provident Fund Organisation (EPFO) has said 12% contribution up to the statutory wage ceiling, which is currently at Rs 15,000 a month, is mandatory. Any contribution above that will be treated as voluntary.Even if your basic salary is Rs 1 lakh a month, Rs 1,800 will be deducted towards your PF contribution – along with a matching contribution by the employer. But you will also have the option to park the amount out of the remaining salary towards retirement savings.”An employee may opt to contribute, on a voluntary basis, an additional contribution on wages exceeding the statutory wage ceiling at statutory rate or at any rate in excess of statutory rate,” according to provisions of the Employees’ Provident Funds Scheme, 2026 notified Wednesday.Employers have the option – not an obligation – to match these additional voluntary contributions, and both the employees and employers can reduce or discontinue such additional voluntary contributions at any time.EPFO simplifies withdrawals, cuts categories from 13 to just 3An official told TOI, “The flexibility introduced in the scheme is to provide greater autonomy to the contributing members for their retirement savings. These provisions have been discussed extensively in the central board of trustee meetings (CBT) and have been made with their concurrence and align with the objectives of the new labour codes.”Given that most private sector employees and employers have a cost-to-company relationship, salaries may be restructured, allowing both sides to work out an arrangement that is beneficial to the EPFO subscriber.The provision regarding coverage, however, remains unchanged as the new scheme provides continuity of membership by specifically stating that employees who were members under the earlier scheme will continue as members.The new scheme implements the changes related to withdrawals which were approved by the Central Board of Trustees last Oct . These changes include increasing the number of withdrawals that can be made in a year and streamlining the categories for drawing out advance funds, from 13 to just three – essential needs (illness, education, marriage); housing needs; and special circumstances.EPFO has also approved advance withdrawal up to 100% of the ‘eligible balance’ in the PF, including employee and employer share, with members now required to always maintain 25% of the contributions in their accounts as the minimum balance.For contract workers, the new scheme specifies the definition of “principal employer” and puts the onus of ensuring PF contributions for contractual staff on them.”The scheme has also clarified that the principal employer is responsible for making payment of PF contribution for employees engaged by or through a ‘contractor’ only where the contractor is not registered independently. However, even where the PF payment is made by the contractor, the ultimate responsibility for contributions remains with the principal employer,” said Puneet Gupta, a partner at EY India.The new scheme also introduces several provisions on compliance requirements/filings to be done by the employer, including one-time, monthly and event-based compliances. Every employer is now required to file a consolidated return (in Form V) within 15 days of application of the scheme, giving details of all employees, including their Aadhaar, PAN, universal account number, gross wages and EPF wages.Along with the EPF Scheme 2026, govt has notified three special drives intended to regularise historical compliance gaps and resolve long-pending issues.Get the latest India news and live updates. Download the TOI App.End of ArticleFollow Us On Social MediaVideos’Highly Deplorable’: India Slams Pakistan Over Demolition Of 125-Year-Old Gurdwara In FarooqabadHealth Concerns Mount As Sonam Wangchuk’s Blood Sugar Falls, Weight Drops As Fast ContinuesDMK Seeks FIR Against CM Vijay, Alleges Plot To Induce MLAs And Alter Assembly NumbersCongress Claims BJP in West Bengal “Will Be Equally Aggressive”; MP Sparks Debate On GovernanceIran Invites BJP Chief Nitin Nabin, Congress Prez Kharge, Pawan Khera To Khamenei’s Funeral: ReportModi Cabinet Reshuffle Buzz: Will NDA Allies And Rebel MPs Find A Place In The Union Cabinet?Three Arrested, Senthil Balaji Under Scanner In Alleged TVK Government Toppling BidCongress Moves Privilege Motion Against Rajnath Singh Over Op Sindoor Claims; Seeks Transparency’Neglecting For 2.5 Years’ Kailash Vijayvargiya’s Letter To CM Mohan Yadav Triggers Political StormWATCH: Eggs, Vegetables Hurled At Mahua Moitra; TMC MP Accuses ‘BJP Goons’, Says Police Stood By123PhotostoriesLock Upp 2: Ram Kapoor, Sunita Ahuja to Akanksha Chamola—contestants’ net worth revealed; this celebrity tops the list with Rs 135 croreWilliam Faulkner’s quote, ‘You cannot swim for new horizons until you have courage to lose sight of the shore,’ perfectly explains why growth demands riskThink you will get your full deposit back? These surprisingly common move-out mistakes could lead to major deductions from your security depositPsychology says children need their parents the most during these 5 vulnerable moments of the day and how parents should respond during these momentsVande Bharat on a budget: 5 routes you can travel for under INR 1,5005 secrets to build an aura everyone feels attracted toPersonality test: Solo trip or holiday with your partner? What your travel style tells you about yourself5 shocking facts about octopuses that seem too strange to be realBengaluru daycare horror: 8 red flags every parent should know before choosing a daycare10 beautiful baby girl names inspired by the beauty of nature and their heartwarming meanings123Hot PicksLPG gas pricePatrick MahomesNEET PG RegistrationEmployees Provident Funds SchemeGTA 6India vs England t20Marcus SmartNayara petrol priceHow to Watch FIFA World Cup TodayTop TrendingNayara energy petrol priceLPG priceKetan Agarwal Murder CaseFIFA World Cup 2026Monaco BlastBengaluru TechieAnukalp MishraSergei IvanovIndigo Check-in Bag FaresAyodhya Ram Temple Donation Theft
NEW DELHI: In an overhaul of provident fund rules for nearly eight crore active members, Employees Provident Fund Organisation (EPFO) has said 12% contribution up to the statutory wage ceiling, which is currently at Rs 15,000 a month, is mandatory. Any contribution above that will be treated as voluntary.Even if your basic salary is Rs 1 lakh a month, Rs 1,800 will be deducted towards your PF contribution – along with a matching contribution by the employer. But you will also have the option to park the amount out of the remaining salary towards retirement savings.“An employee may opt to contribute, on a voluntary basis, an additional contribution on wages exceeding the statutory wage ceiling at statutory rate or at any rate in excess of statutory rate,” according to provisions of the Employees’ Provident Funds Scheme, 2026 notified Wednesday.Employers have the option – not an obligation – to match these additional voluntary contributions, and both the employees and employers can reduce or discontinue such additional voluntary contributions at any time.
EPFO simplifies withdrawals, cuts categories from 13 to just 3
An official told TOI, “The flexibility introduced in the scheme is to provide greater autonomy to the contributing members for their retirement savings. These provisions have been discussed extensively in the central board of trustee meetings (CBT) and have been made with their concurrence and align with the objectives of the new labour codes.”Given that most private sector employees and employers have a cost-to-company relationship, salaries may be restructured, allowing both sides to work out an arrangement that is beneficial to the EPFO subscriber.The provision regarding coverage, however, remains unchanged as the new scheme provides continuity of membership by specifically stating that employees who were members under the earlier scheme will continue as members.The new scheme implements the changes related to withdrawals which were approved by the Central Board of Trustees last Oct . These changes include increasing the number of withdrawals that can be made in a year and streamlining the categories for drawing out advance funds, from 13 to just three – essential needs (illness, education, marriage); housing needs; and special circumstances.EPFO has also approved advance withdrawal up to 100% of the ‘eligible balance’ in the PF, including employee and employer share, with members now required to always maintain 25% of the contributions in their accounts as the minimum balance.For contract workers, the new scheme specifies the definition of “principal employer” and puts the onus of ensuring PF contributions for contractual staff on them.“The scheme has also clarified that the principal employer is responsible for making payment of PF contribution for employees engaged by or through a ‘contractor’ only where the contractor is not registered independently. However, even where the PF payment is made by the contractor, the ultimate responsibility for contributions remains with the principal employer,” said Puneet Gupta, a partner at EY India.The new scheme also introduces several provisions on compliance requirements/filings to be done by the employer, including one-time, monthly and event-based compliances. Every employer is now required to file a consolidated return (in Form V) within 15 days of application of the scheme, giving details of all employees, including their Aadhaar, PAN, universal account number, gross wages and EPF wages.Along with the EPF Scheme 2026, govt has notified three special drives intended to regularise historical compliance gaps and resolve long-pending issues.
