India’s Union Ministry of Labour and Employment has notified the Employees’ Provident Fund (EPF) Scheme, 2026, under the Code on Social Security, 2020, replacing the long-standing Employees’ Provident Funds Scheme, 1952. The new framework largely modernises several operational aspects relating to membership, contributions, withdrawals, compliance, and fund administration. It also introduces a one-time amnesty mechanism to help employers regularise historical compliance gaps and resolve long-pending disputes.
The new EPF Scheme came into effect on 1 July 2026 and can be seen as a significant development in the phased implementation of India’s labour codes. Although many core provisions from the 1952 law remain unchanged, the revised framework establishes clearer governance requirements for employers and exempted establishments.
Employee provident fund 2026: Coverage and membership
India’s new employee provident fund framework automatically transitions all existing members covered under the Employees’ Provident Funds Scheme, 1952, into the new framework without requiring fresh enrolment, ensuring continuity of membership. It also preserves existing provident fund balances and membership history.
The new framework continues to treat employees whose wages exceed the statutory wage ceiling as excluded employees, unless both the employer and employee jointly opt for voluntary EPF coverage. It also introduces a formal mechanism for resolving disputes relating to membership eligibility or the date from which coverage applies.
EPF Compliance Support
Align payroll systems, contribution calculations, employee onboarding, and statutory reporting with the new EPF framework.New employee provident fund contribution framework
The EPF contribution structure remains largely unchanged. Employers and employees must each contribute 12 per cent of EPF wages, while establishments notified by the central government may continue to contribute at the concessional rate of 10 per cent where applicable.
For employees earning above the statutory wage ceiling, mandatory contributions continue to be calculated only up to the prescribed limit. However, the scheme provides greater flexibility by allowing employees to voluntarily contribute to wages exceeding the ceiling or at a rate higher than the statutory contribution.
Unlocking withdrawal and employee benefits
Through the new EPF scheme, 2026, India simplifies access to provident fund savings while safeguarding employees’ long-term retirement security.
Members can withdraw their full EPF balance upon retirement, permanent and total disability, permanent migration from India, overseas employment, retrenchment, voluntary retirement, and certain cases of prolonged unemployment, provided they satisfy the prescribed eligibility conditions.
The scheme also streamlines the rules governing partial withdrawals. After completing the prescribed membership period, members can withdraw funds for medical treatment, education, marriage, the purchase or construction of a house, home loan repayment, renovation, and other notified special circumstances. Depending on the purpose, members can withdraw up to their eligible balance while maintaining a minimum balance equal to 25 per cent of their accumulated provident fund contributions.
Enhanced digital services for employees
The scheme places greater emphasis on digital administration and employee self-service.
Every EPF member is required to furnish Aadhaar, PAN, Aadhaar-linked bank account details, Universal Account Number (UAN), and family information for electronic nomination. Employees must also disclose previous EPF memberships and employment history to facilitate seamless account portability.
Members can submit and modify nominations electronically at any time. Fresh nominations are required following marriage, while nominations automatically become invalid if they are inconsistent with the member’s subsequent family status.
Employer compliance requirements under EPF 2026
The EPF Scheme, 2026, introduces a more comprehensive compliance framework by prescribing one-time, recurring, and event-based filing obligations.
A key requirement is the submission of a consolidated Form V within 15 days of the EPF scheme becoming applicable to an establishment. The return must include employee details such as Aadhaar, PAN, Universal Account Number (UAN), gross wages, and EPF wages. However, the government has not yet clarified whether this requirement also applies to establishments already covered under the previous employee provident fund guidelines.
Beyond initial registration, employers are required to electronically report new joiners, employee exits, monthly contribution details, ownership changes, and authorised signatories. They must also facilitate UAN generation, enable employees to access electronic passbooks, maintain employment records in digital form wherever applicable, and provide records electronically during inspections.
Interest, penalties, and enforcement
The scheme codifies the methodology for calculating interest on EPF balances. Interest will continue to accrue on monthly running balances at rates notified annually by the central government. This will be done in consultation with the central board and will remain payable up to the date on which withdrawal is authorised.
To strengthen compliance, the scheme introduces a graded damages structure for delayed EPF payments:
|
Period of default |
Damages |
|
Less than two months |
0.25 per cent of arrears per month |
|
Two to four months |
0.50 per cent of arrears per month |
|
More than four months |
1 per cent of arrears per month |
Delayed filing of statutory returns also attracts a late fee of INR 500/day (US$5.25), subject to the prescribed cap.
Special provisions for international workers under EPF
The scheme consolidates provisions governing international workers and continues India’s social security agreement framework.
Employees covered under India’s Social Security Agreements (SSAs) continue to receive treaty-based benefits, while detached workers from countries having reciprocal agreements may remain exempt from Indian EPF contributions where applicable. International workers opting to avail benefits under applicable bilateral agreements may contribute their entire wages instead of the statutory wage ceiling. The 2026 EPF scheme also specifically recognises the United Kingdom under the notified bilateral SSA.
Governance of exempted establishments
The EPF Scheme, 2026, strengthens the regulatory framework governing exempted establishments operating their own provident fund trusts.
The revised provisions prescribe detailed requirements relating to the following:
- Constitution and functioning of boards of trustees
- Electronic maintenance of accounts
- Investment of trust funds
- Annual audits
- Online claim settlement
- Periodic reporting
- Renewal and cancellation of exemptions
- Transfer of accumulated balances upon surrender or cancellation of exempted status
Preparing for the EPF Scheme, 2026?
India’s new EPF framework introduces revised employer reporting requirements, enhanced digital compliance obligations, updated KYC standards, and changes to withdrawal administration. Businesses should review their payroll systems, HR documentation, employee onboarding processes, and EPF compliance procedures to ensure readiness under the new framework.
Our India HR and payroll specialists can help you:
- Assess your EPF compliance obligations under the EPF Scheme, 2026
- Review payroll and statutory contribution processes
- Update employee onboarding and KYC documentation
- Strengthen monthly EPF filing and reporting procedures
- Advise on compliance requirements for exempted establishments and international workers
(US$1 = INR 95.17)
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