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Sarvesh Agrawal  | Answer  |Ask -

Internship, Online Education Expert - Answered on Apr 11, 2023

In 2010, Sarvesh Agrawal founded Internshala, an online career platform that helps college students find internships and fresh graduates find job opportunities. Internshala also has its own skill-training platform, Internshala Trainings. Agrawal, who was the first student from his hometown, Nawalgarh (in Rajasthan) to make it to an IIT, holds an MTech in civil engineering from IIT-Madras. As Internshala’s CEO, he hopes to help students and young graduates get the right start to their career.... more
Asked by Anonymous - Feb 26, 2023Hindi
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Weplan to recruit a few apprentice officers in our organization for a period of one year for a fixed stipend. Depending upon their performance, they may be absorbed as regular employees. Will we have to deduct provident fund from the fixed stipend to be paid to them? Varsha Godbole

Ans: Not sure about apprentice officers but if you hire them as interns, then you need not deduct any PF since interns are treated as contractual employees as per law and PF is not applicable.
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Ramalingam

Ramalingam Kalirajan  |8544 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 10, 2025

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Sir, My sons salary is 1.5 lakhs per month but the employer is deducting EPF subscription only on 15000 and similarly the Employers contribution is also made on 15000. Is it permissible uner the Act ? Is it not mandatory to increase the EPF subsription and Employers contribution on his basic pay which is higher than 15000?
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

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Nayagam P

Nayagam P P  |5380 Answers  |Ask -

Career Counsellor - Answered on May 28, 2025

Asked by Anonymous - May 28, 2025
Career
Hello sir, my daughter got 79563 rank in jee mains.She is also getting COE branch at Thapar..may upgrade to CSE branch. For JAC counselling should we choose DTU ,NSUT electrical branch or IGDTUW ECE.. Which is better in terms of placement Thanks
Ans: With a JEE Main rank of 79,563, the chances of admission through JAC Delhi counselling into top branches like Computer Science Engineering (CSE), Electronics and Communication Engineering (ECE), or Electrical Engineering in premier Delhi colleges are quite low. These colleges—Delhi Technological University (DTU), Netaji Subhas University of Technology (NSUT), Indira Gandhi Delhi Technical University for Women (IGDTUW), Indraprastha Institute of Information Technology Delhi (IIIT-D), and Delhi Skill and Entrepreneurship University (DSEU)—typically have closing ranks much better than 80,000 for popular branches like CSE and ECE.

Generally, CSE and ECE branches close within ranks under 20,000–30,000 in DTU and NSUT, while Electrical Engineering may have slightly relaxed cutoffs but still far below 79,000. IGDTUW is women-only but also highly competitive. DSEU has more seats but lower preference for top branches. A female candidate with rank 79,563 may get admission in less sought-after branches or in later rounds/spot rounds if seats remain vacant, but chances for CSE/ECE/Electrical in top JAC Delhi colleges are slim.

Using JAC Delhi College Predictor tools can provide personalized estimates based on category and gender.

summarise the above in 150 words along with all the names of colleges
summarise the above in 150 words along with all the names of colleges
With a JEE Main rank of 79,563, admission chances through JAC Delhi counselling for top branches like Computer Science and Engineering (CSE), Electronics and Communication Engineering (ECE), or Electrical Engineering are very slim. For the general category, the expected closing ranks for CSE/IT branches at premier Delhi colleges are much lower: Delhi Technological University (DTU) closes around rank 5,200; Netaji Subhas University of Technology (NSUT) and Indira Gandhi Delhi Technical University for Women (IGDTUW) have similar or lower cutoffs; and Delhi Skill and Entrepreneurship University (DSEU) closes around 27,000 for CSE. Electrical and ECE branches generally have higher closing ranks but still well below 79,563—for example, DTU Electrical Engineering closes near 20,000. Other reputed institutes like IIIT Delhi have even tighter cutoffs (CSE around 7,500). Thus, with your rank, securing admission in CSE, ECE, or Electrical branches through JAC Delhi counselling at DTU, NSUT, IGDTUW, DSEU, or IIIT Delhi is highly unlikely. All the best for your daughter's admission and a bright future!

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