Hello Sir, I started my career in 2017, I was never part of EPS scheme of EPF. My new company has started contributing to EPS, is it allowed to do so?
Ans: Yes, it is allowed for your new company to start contributing to EPS for you, even though you were not previously part of the EPS scheme. Currently, employees and employers can contribute 12% of the basic salary and dearness allowance to the EPF. Of the employer’s 12% contribution, 8.33% goes to the Employees’ Pension Scheme (EPS) and 3.67% to the EPF.
However, the 8.33% EPS contribution is capped at the maximum amount of Rs. 15,000 even when the employee draws a higher salary. The cap on the EPS contribution was introduced in 2014 through an amendment to the EPS.