New Delhi. If you want to increase the contribution in your EPS by taking advantage of the Higher Pension Scheme, then July 11 is the last date to apply for it. Earlier the deadline was June 26, which was extended till July 11. If you had become a member of Employees Provident Fund Organization (EPFO) on September 1, 2014, then you can apply for this scheme.
Actually, the rule of contribution in EPFO is clear that 12 percent of the basic salary of the employee will go to EPFO, the same amount will be contributed by the employer. Now, out of the employer’s share, 8.33 per cent is for pension share and 3.67 per cent for provident fund. But no matter how much the basic salary increases, the pension share does not go beyond Rs.1250.
The capping rule on pension share came into force on 1st September, 2014. Many employees opposed this. The matter reached the court. The Supreme Court did not remove the cap, but gave an option to the employees who had joined EPFO till September 1, 2014, to claim their entire pension share i.e. 8.33 per cent pension share.
How much EPS is deducted now?
If you have ever checked your passbook on EPFO, then you must have seen that there is also a column of pension share in it. In that column, either Rs 1250 is entered or it is less than that. The rule is that 8.33 percent of the share that goes to EPFO from the employer’s side goes to pension and 3.67 percent to EPFO. But there is also a default rule that pension share will not be given more than Rs.1250.
However, employees who had joined EPFO on the date of September 1, 2014, have the option to claim the entire 8.33 per cent of their pension share. Means, instead of only Rs.1250, as much as his pension share is actually made, he can include that much in his pension share. Due to this, the pension which is received on retirement, can get more benefit.
For example, if the basic salary of an employee is Rs 1 lakh, then his EPFO contribution will be Rs 12,000. His company will put the same amount in EPFO. By law, the pension share becomes 8330, but the rule is that only 1250 will go to the pension. The rest will go to EPF. But if you choose the option of higher pension, then you can put the entire Rs 8330 in the pension scheme.
How to apply?
If you are eligible for the Higher Pension Scheme and want to apply for it, then you have to apply by visiting the EPFO portal. Necessary documents have to be given. In UAN, just go to the e-Sewa portal and go to the member interface and apply.
After the application is submitted, verification will be sought from the employer of the employee. EPFO officers will verify the application, once everything is correct, the process of transferring the dues will start. If there is any discrepancy in the forms, the employee and his employer will be given one month to rectify it.