EPF Scheme 2026 Notified: Centre Revamps Provident Fund Framework

The Centre has notified the EPF Scheme, 2026, replacing the 1952 scheme. Effective immediately, it aims for digital compliance and simplified processes, retaining the 12% contribution rate while easing rules for partial withdrawals.

The Centre has notified the Employees' Provident Fund (EPF) Scheme, 2026, replacing the Employees' Provident Fund Scheme, 1952, in a major revamp of India's provident fund framework aimed at enhancing digital compliance, simplifying processes and supporting the implementation of the labour codes. The new scheme, notified by the Ministry of Labour and Employment on Monday, comes into effect immediately.

While retaining the statutory contribution of 12 per cent each by employers and employees, it introduces a more technology-driven and compliance-focused framework. According to Puneet Gupta, Partner, People Advisory Services, EY India, the scheme is a key step towards implementing the labour codes. "The new Employees' Provident Fund Scheme, 2026 represents a major milestone in the next phase of implementation of the labour codes. Coming into effect immediately, it modernises the provident fund framework through greater digitalisation, simplified processes and enhanced compliance requirements for both employers and employees," Gupta told ANI.

Key Changes and Benefits for Employees

One of the major changes under the new scheme is the simplification of partial withdrawal rules. EPF members will now be able to withdraw funds for illness, education, marriage, housing-related requirements and specified special circumstances, subject to prescribed conditions and maintenance of a minimum balance. The scheme also mandates members to furnish Aadhaar, PAN and Aadhaar-seeded bank account details to facilitate digital processing.

Highlighting the benefits for employees, Gupta said, "From an employee's perspective, some of the most notable changes relate to withdrawals and access to savings. Members will be able to make partial withdrawals under simplified rules for essential needs such as illness, education and marriage, as well as for housing requirements and specified special circumstances, subject to prescribed conditions and maintenance of a minimum balance."

He further noted that employees earning above the statutory wage ceiling can continue to remain outside mandatory EPF coverage unless both the employer and employee jointly opt for inclusion. The statutory contribution rate remains unchanged at 12 per cent for both employers and employees. However, the scheme provides that mandatory contributions for employees earning above the wage ceiling will be calculated only up to the notified ceiling. Employees may voluntarily contribute on wages exceeding the ceiling or contribute at a rate higher than 12 per cent, with employers having the option to make matching contributions. Such voluntary contributions may also be reduced or discontinued later by both parties.

New Compliance Obligations for Employers

For employers, the scheme introduces additional governance and compliance requirements, including contractor compliance, ownership disclosures, electronic filings and new obligations for exempted provident fund trusts. "For employers, the new framework introduces enhanced governance and compliance obligations, particularly around contractor compliance, ownership disclosures, electronic filings and exempted PF trusts," Gupta said.

He added that three new initiatives--the Employees' Enrolment Campaign 2026 for previously uncovered employees, VISHWAS 2026 for reduction of damages in legacy litigation matters, and AMNESTY 2026 for employers operating private PF trusts--will provide an opportunity to regularise past compliance gaps and resolve long-pending issues.

Under the new framework, employers will be required to file prescribed returns within 15 days and comply with a range of electronic reporting obligations, including ownership disclosures and monthly employee-related filings. Organisations operating exempted provident fund trusts will also have to apply for continuation of exemption within the prescribed transition period.

"Overall, the Scheme reflects a clear policy direction towards wider social security coverage, stronger digital compliance and improved delivery of benefits." Gupta said (ANI)

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