EPFO 3.0 Update: The Indian government is actively working to upgrade EPFO 3.0 by raising the monthly wage limit, which requires mandatory provident fund contributions from Rs 15,000 to Rs 25,000. The current proposal under high-level review aims to provide social security benefits to additional low- and mid-skilled workers who have been excluded from benefits since 2014 because of inflation and salary increases.
EPFO 3.0 Update: Supreme Court Directive Sparks Action
The Supreme Court ordered EPFO to change its limits within four months, which created urgency for the operation. The existing wage limits prevent many workers from joining the PF EPS, and EDLI programs. The proposed change would begin on April 1, 2026, and the EPFO Central Board of Trustees will discuss it at their upcoming meeting next month.
EPFO 3.0 Update: Implications
The new reform will integrate more than 1 crore workers into the system, which will strengthen India’s social security framework. The stakeholders need to assess how the system will affect their current income because it provides better retirement benefits. The first wage increase in 12 years represents a forward-thinking policy response to rising wage levels.
EPFO 3.0 Update: Benefits and Impacts
The increased ceiling between Rs 25,000 and Rs 30,000 will create more EPFO subscribers while driving more funds into EPF and EPS, which will enhance total retirement security financial resources. The long-term savings and pension system would benefit from this change, according to experts who include Puneet Gupta from EY India, because it matches Pay Commission recommendations and current economic conditions.
The new deduction structure forces employees who earn between Rs 15,001 and Rs 25,000 to lose more of their pay because of increased deductions, which amount to 12 percent from both their employer and themselves. The new Labour Codes, including wage and gratuity modifications, will increase employer expenses for compliance and contribution requirements, which will affect their profit margins.
