Hello sir... Currently I am pursuing MBA final semester. And complete my B.SC DEGREE planning to go abroad further. Would you recommend me any course which are related to my past education

Ans: Your son earns Rs 1.5 lakh per month, but EPF deductions are only on Rs 15,000. This is a common concern among salaried individuals. Let’s assess whether this is permissible and what options are available.

 

EPF Contribution Rules Under the Law
The Employees’ Provident Fund (EPF) is governed by the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.

As per the EPF rules, it is mandatory for employees earning up to Rs 15,000 per month to contribute 12% of their basic salary plus dearness allowance (DA) towards EPF.

Employers must match this contribution with their own 12%, but part of it (8.33%) goes to the Employees’ Pension Scheme (EPS).

For employees earning more than Rs 15,000 per month, EPF contributions above Rs 15,000 are not mandatory. Employers are allowed to restrict contributions to Rs 15,000 unless both employer and employee voluntarily agree to contribute more.

 

Is the Employer’s Practice Legal?
Since your son earns Rs 1.5 lakh per month, his employer is legally allowed to cap the EPF contribution at Rs 15,000.

The law does not mandate contributions on the full basic pay if it exceeds Rs 15,000.

If your son wants a higher EPF contribution, he can opt for Voluntary Provident Fund (VPF), but the employer is not obliged to match it.

 

Should Your Son Increase His EPF Contribution?
EPF is a safe and tax-efficient retirement savings option. However, it has limitations when it comes to wealth creation. Let’s assess the pros and cons of increasing EPF contributions.

 

Advantages of Increasing EPF Contribution
Safe and Guaranteed Returns – EPF provides fixed returns declared by the government.

Tax-Free Interest – Interest earned on EPF is tax-free up to Rs 2.5 lakh annual contribution.

Forced Savings for Retirement – Higher contributions ensure disciplined long-term savings.

 

Disadvantages of Increasing EPF Contribution
Limited Growth Potential – The return on EPF is lower than actively managed equity mutual funds.

Liquidity Constraints – Funds in EPF are locked until retirement, with limited withdrawal options.

Employer’s Contribution Won’t Increase – Even if your son contributes more via VPF, the employer’s share remains capped at 12% of Rs 15,000.

 

Alternative Investment Options for Better Wealth Creation
If your son wants higher returns, he should consider other investment options instead of increasing his EPF contribution.

 

1. Actively Managed Mutual Funds
Actively managed mutual funds have higher return potential than EPF over the long term.

They are professionally managed and provide exposure to high-growth sectors.

A mix of large-cap, mid-cap, and flexi-cap funds can create a balanced portfolio.

 

2. Voluntary Provident Fund (VPF) – A Safe Option
If he prefers safe investments, he can opt for VPF, which offers EPF-like returns but without an employer match.

It is suitable if he wants fixed returns with tax benefits.

 

3. Public Provident Fund (PPF) for Long-Term Safety
PPF is a great option for long-term tax-free compounding.

The investment is locked for 15 years, ensuring retirement security.

 

4. Diversified Portfolio for Growth
Instead of putting all savings in EPF, he should allocate funds across different asset classes.

A combination of EPF, mutual funds, and fixed-income products will provide both safety and growth.

 

What Should Your Son Do Next?
Your son should evaluate his long-term financial goals before deciding on EPF contributions.

 

If He Prefers Safety:
Keep EPF contributions as they are.

Increase investment in VPF or PPF.

 

If He Wants Higher Returns:
Keep EPF limited to Rs 15,000 cap.

Invest in actively managed mutual funds for better wealth creation.

Consider a mix of equity and debt investments based on risk appetite.

 

Final Insights
Your son’s employer is following the law correctly by restricting EPF contributions to Rs 15,000. While increasing EPF contributions can provide stability, it limits growth potential and liquidity. Instead, a diversified approach with actively managed mutual funds and fixed-income options can offer better long-term wealth creation.

Encourage your son to review his financial goals and create an investment strategy that balances safety and returns.

 

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: Hello Chetan
Nothing is mentioned about your home town and state hence It is very difficult to advise you by sitting remotely on how to prepare for JEE in the drop year. Also difficult to suggest you about coaching class. It is better to consult with your local teachers to whom you trust more and they have taught you also. They can help you as they know about capability and lacunas/weaknesses related to syllabus understanding. Also, you have prepared for yourself for 2 years. Hence you know what you know and what not. Yet here are some tips for you - (1) Take the help of subject expert teachers (2) Join online classes and test series if possible (3) Try to solve the previous year's JEE examinations papers (4) Focus more on the syllabus areas in which you are more comfortable. (5) There is no need to learn 100% syllabus. Even by completing around 75-80 % syllabus, you can score better in the JEE exam. Best of luck to you

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Ans: Hello Murugan
There are fewer chances for CSE but can be for Aerospace Engineering.

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Ans: Hello dear
You have low chances yet you can try for newly formed NITs but surely can get admission to IIITs.
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Ans: Hello Dear.
With the given percentile and category there are chances to get admission to one of the mentioned branches in NITs.

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Ans: Hello Dear.
Difficult to get admission to NITs but surely to IIIT through CSAB counseling. Please visite the official website if IIIT Allahabad to know previous year cut off for more clarity.
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Ans: Hello Nagasubbareddy
I can't say anything about Trichy, but he will be admitted to tier 1 NIt's in CSE. Please visit the official website of NIT Trichy to know the previous year's cut-off for more clarity.
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Ans: Hello Biban
Appear for Mathematics as an isolated subject, which will make you eligible to appear for JEE.
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Ans: Hello Fasil
There are low chances to get NIT. But other colleges can get her.
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