Your payslip is worth a look today. If the EPF line reads 12% of basic rather than ₹3,000, you are contributing above the legal minimum and everything above that minimum is voluntary on both sides, something the July 2026 rules now make explicit.
That's not a problem in itself. It just means there's a choice available that most people haven't had reason to think about.
Since 17 September 2026, the statutory EPFO wage ceiling has risen from ₹15,000 to ₹25,000 a month. If you already contribute on your full basic pay, that arrangement does not change automatically.
Here's what a different mix could look like on a ₹70 lakh CTC, ₹35 lakh basic, age 40 to 60.
Per month EPF stays at 12% EPF at ₹3,000, surplus moved Employer EPF
₹35,000
₹3,000
Employee EPF
₹35,000
₹3,000
Employer NPS
₹27,500 (9.43% of basic)
₹40,833 (14% of basic)
Take-home
₹3,49,268
₹3,93,529
Available to invest in mutual funds
—
₹44,260
Value at 60
EPF
₹3,73,99,357
₹33,87,538
NPS
₹3,11,60,539
₹4,62,68,679
Mutual funds
—
₹4,07,13,132
Total at 60
₹6.86 Cr
₹9.04 Cr
Return assumptions: EPF 8.25%, NPS 13.7%, equity funds 12% post-tax. The second column assumes that ₹44,260 is invested every month for twenty years, and carries market risk.
What it means for pension income The totals above are shown largely after tax, but NPS works differently. Part of it has to buy a pension, and that pension is taxed as you receive it. So here's what that income is worth in today's money, as a fairer point of comparison.
NPS pension EPF stays at 12% EPF at ₹3,000, surplus moved Annual pension before tax
₹7,47,853
₹11,10,448
Annual pension after tax
₹5,98,282
₹8,88,359
Value of that income today
₹31,77,992
₹47,18,836
Assuming 40% of the NPS value buys an annuity paying 6% a year, pension taxed at an effective 20%, 25 annual payments, discounted at 5%. This pension is paid out of the NPS value shown above, so it shouldn't be added to the total.
How the tax works Rule EPF at 12% EPF at ₹3,000 Employer NPS is deductible up to 14% of basic + DA under the new regime, 10% under the old
Only 9.43% usable
Full 14% used
₹7.5L a year is the combined tax-free limit on employer EPF, NPS and superannuation
₹7,50,000, limit full
₹5,26,000, room to spare
₹2.5L a year, your EPF interest above this is taxed where your employer also contributes
₹1.7L over the line, taxed at 34.32%. About ₹12.94L lost over 20 years
Well under the limit
Annual salary TDS
₹16,38,780
₹17,15,657
The second column does pay ₹76,877 more tax a year. That's because the ₹7.5 lakh limit has no space left for the freed-up money, so it reaches you as salary instead.
One point the table can't quite capture: the ₹9.04 Cr depends entirely on the ₹44,260 being invested every month without fail. If it's spent instead it will be a reduction in retirement savings.
Before you make a change Most large companies have two restructuring windows: one at the start of the financial year, and another in the second half, usually around October to December. The second one may be coming up soon.
It's worth comparing both structures on everything at once like salary tax, tax on EPF interest, tax when you withdraw from NPS, and future pension income. Then checking the projection against your own balances and actual CTC components rather than a clean example. Tax rules and market returns can both change a good deal over twenty years.
We would suggest speaking to your adviser about which structure suits your goals, tax position and appetite for risk.
If you decide to go ahead Check your payslip and confirm which setting you're on
Ask payroll whether the company is registered for corporate NPS
Request EPF at ₹3,000, employer NPS at 14% of basic, and the difference moved inside your CTC
Set the SIP up in the same week, dated to your salary credit
TF IQ: Why ₹58 lakh is worth knowing
If basic pay is half your CTC, employer EPF at 12% of basic works out to 6% of CTC, and employer NPS at 14% of basic is another 7%. Together that's 13% of CTC, which reaches the ₹7.5 lakh tax-free limit at a CTC of roughly ₹58 lakh.
Above that point, it becomes difficult to fill both EPF and NPS inside the limit, which is where this decision starts to matter most. The exact figure shifts with your basic pay, DA and any superannuation your employer offers.
A note on comparing EPF and NPS
EPF and NPS aren't like-for-like. EPF is essentially a debt investment with a declared rate. NPS, especially with a higher equity allocation, is market-linked and can rise or fall with markets. The comparison above shows two different mixes of risk, not two versions of the same product.
Which mix suits you depends a great deal on how far you are from retirement. For someone retiring in three years, for instance, keeping EPF at 12% of basic may well remain the better choice, since there's little time to recover from a market fall.
