EPFO launches “VISHWAS, 2026” – Amnesty Scheme for Reduction of PF Damages
The Employees’ Provident Fund Organisation (EPFO) has notified VISHWAS, 2026, a one-time amnesty scheme providing substantial relief to employers against damages levied under Section 14B of the EPF & MP Act, 1952 (or Section 128 of the Code on Social Security, 2020). The scheme significantly reduces the rate of damages for eligible historical defaults and provides an opportunity to settle long-pending disputes at considerably lower cost.
1. Introduction
EPFO has introduced VISHWAS, 2026 with the objective of facilitating amicable settlement of disputes relating to damages for delayed remittance of Provident Fund contributions.
The scheme offers a substantial reduction in damages for eligible cases relating to defaults prior to 14 June 2024, thereby enabling employers to resolve pending proceedings and litigation with significant financial savings.
2. Background
Historically, damages under Para 32A of the Employees’ Provident Fund Scheme, 1952 were levied at comparatively higher rates depending upon the period of delay.
With the notification of the EPF Scheme, 2026, EPFO has simultaneously introduced VISHWAS, 2026, which prescribes concessional rates of damages for eligible historical defaults.
For establishments having pending 14B proceedings, appeals or unpaid damage orders, this presents an excellent opportunity to settle disputes at nearly half the earlier rate in long-delay cases.
3. Scheme Period
Scheme commencement: 29 June 2026
Validity: Six months from the date of notification
Accordingly, employers may apply under the scheme up to 28 December 2026 (subject to any extension by EPFO).
4. Benefit Available For
The reduced rates under VISHWAS apply only to damages relating to periods of default prior to 14 June 2024, irrespective of when the proceedings are concluded, provided the case satisfies the eligibility conditions prescribed under the scheme.
5. Comparison of Damages Rates
| Period of Default | Earlier Rate under Para 32A (EPF Scheme, 1952) | Rate under VISHWAS, 2026 | Approximate Reduction |
|---|---|---|---|
| Less than 2 months | 5% p.a. | 3% p.a. (0.25% per month) | 40% |
| 2 months to less than 4 months | 10% p.a. | 6% p.a. (0.50% per month) | 40% |
| 4 months to less than 6 months | 15% p.a. | 12% p.a. (1.00% per month) | 20% |
| Beyond 6 months | 25% p.a. | 12% p.a. (1.00% per month) | Approximately 52% reduction |
Key Takeaway
The largest benefit is available in cases involving defaults exceeding six months.
Under the earlier Para 32A, damages could be levied at 25% per annum, whereas under VISHWAS they are effectively restricted to 12% per annum, resulting in a reduction of nearly one-half of the damages liability.
6. Who Can Avail the Scheme?
The scheme covers the following categories of establishments:
A. Pending Litigation
Where damages under Section 14B/Section 128 are under challenge before any judicial forum.
B. Final Orders where Damages remain Unpaid
Includes:
- Recovery Certificate (RRC) cases
- Partially paid cases
- Completely unpaid damage orders
C. Notice Issued but Final Order Pending
Where proceedings have commenced but the final damages order has not yet been passed.
D. Cases where Notice is yet to be issued
Even if proceedings have not commenced, eligible historical defaults may still be covered.
7. Important Conditions
Employers should note the following conditions before applying:
- Entire interest under Section 7Q (or Section 127 of the Code) must be fully paid before submitting the application.
- Employer must furnish an undertaking that no further appeal shall be pursued after settlement under VISHWAS.
- Applications are to be submitted online through the EPFO employer portal.
- The application must be authenticated using Digital Signature Certificate (DSC) or e-Sign.
- Upon approval, the revised damages are required to be paid within the stipulated timeline specified by EPFO.
8. Cases Not Eligible
The following cases have specifically been excluded:
- Damages already fully recovered.
- Cases involving fraud, misappropriation or deliberate falsification of records.
- Cases where the applicable interest has not been fully remitted.
9. Why Employers Should Evaluate This Scheme
Employers having pending PF damage proceedings should immediately review their cases because the scheme offers:
- Significant reduction in damages.
- Opportunity to conclude long-pending litigation.
- Reduced financial exposure.
- Faster closure of historical PF disputes.
- Certainty and finality in compliance matters.
For many establishments, the financial benefit may run into several lakhs of rupees, particularly where delays exceeded six months.
Disclaimer : The attached document is a personal opinion of the writer based on the material available shared with the intent of passing the knowledge. No liability arises on the author, legal or otherwise.
—
CA Darshan balai
www.payrule.in
darshan@payrule.in