EPFO Rule: Can you contribute more than 12% to your PF account? If you want a substantial fund for retirement, learn this secret..

EPFO Rule: The Employees' Provident Fund Organisation (EPFO) scheme is not only a means of saving, but also a source of financial security in old age. But did you know that within the framework of the rules, you can deposit more money than the prescribed limit? The EPFO ​​has clarified some rules to address this dilemma faced by employees. If you also want to accelerate your retirement savings, it is crucial to understand the contribution limits and the specific provisions associated with them.

Can the 12% 'Lakshman Rekha' (limit) be crossed?
Many people often believe that the 12% deduction from their salary for EPF is a fixed rule that cannot be changed. But the reality is slightly different. According to EPFO ​​rules, any employee can voluntarily contribute more than the normal 12% deduction through 'Voluntary Contribution'.

This is entirely at the employee's discretion. The biggest advantage of this is that when you deposit more money than the basic limit, your retirement savings grow faster. Also, the compounding interest earned on EPF applies to this increased amount, resulting in a larger fund in the long term.

The company will only contribute the same amount.
There's a catch here that needs to be understood. Even if you decide to have more than 12% deducted from your salary, your employer (company) is not obligated to match it. According to the rules, the company is only responsible for contributing up to the legal rate, i.e., 12%. This means that the extra money will only come from your pocket; the company will not 'match' it.

Furthermore, the rules also stipulate that the contribution is generally calculated based on a wage ceiling of Rs. 15,000. However, if your salary is higher than this and you want your PF to be deducted from your 'actual salary', a specific procedure needs to be followed.

What are the conditions for those with higher salaries? If an employee's salary is more than ₹15,000 and they wish to contribute to their EPF account based on their full actual salary, simply submitting an application is not sufficient. Under Paragraph 26(6) of the EPF Scheme, they are required to obtain permission from the Assistant Provident Fund Commissioner (APFC) or the Regional Provident Fund Commissioner (RPFC). Only after receiving this official approval can they begin contributing to their provident fund based on their full salary. This rule ensures transparency in the process and prevents any difficulties during future claim settlements.

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