Understanding the EPFO VISHWAS 2026 Scheme, Eligibility, Reduced Damages Rates and Application Process
Provident Fund compliance is one of the most important statutory responsibilities for employers in India. Delays or defaults in depositing EPF contributions can lead to interest and damages, and in many cases, these liabilities can remain unresolved for years through notices, recovery proceedings or litigation.
To provide relief to employers and encourage the resolution of long-pending disputes, the Employees’ Provident Fund Organisation (EPFO) has introduced VISHWAS, 2026.
The scheme provides eligible employers with a one-time opportunity to settle certain EPF damages/penalty matters at substantially reduced rates. It applies to eligible defaults relating to periods prior to 14 June 2024.
For businesses with old PF damages matters, this is not something that should be ignored. Employers should review their records and determine whether their cases qualify before the scheme window closes.
VISHWAS, 2026 is a one-time dispute resolution initiative introduced by EPFO for amicable settlement of disputes relating to damages or penalty under Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and the corresponding provision under the Code on Social Security, 2020.
The scheme was notified through G.S.R. 525(E) dated 29 June 2026 and came into effect from the same date. It is operational for six months from the date of notification.
The primary objectives of the scheme are to:
PF damages cases can become complicated when they remain pending for several years.
An employer may have an old matter involving:
Instead of allowing such matters to continue indefinitely, eligible employers now have an opportunity to examine whether the matter can be settled under VISHWAS, 2026.
The scheme is particularly relevant because the damages applicable under it are substantially lower than the normal rates, subject to the eligibility conditions and provisions of the scheme.
VISHWAS, 2026 broadly covers eligible cases falling into four categories:
Cases where an order imposing damages or penalty has already been issued and is being challenged before a judicial forum.
This may include matters pending before appropriate judicial or appellate forums.
Cases where a final damages/penalty order has already been passed but the amount has not been fully recovered.
This also includes eligible cases involving pending or partially recovered Recovery Certificates.
Cases where EPFO has issued a notice for damages/penalty, but the final order has not yet been passed.
Cases involving eligible historical defaults where the relevant damages/penalty notice has not yet been issued.
These four categories are specifically identified by EPFO under the scheme.
One of the most significant benefits of the scheme is the reduction in the damages rate for eligible defaults relating to the period before 14 June 2024.
The applicable rates are:
| Period of Default | Damages Rate Under VISHWAS, 2026 |
| Up to 2 months | 0.25% per month |
| More than 2 months and less than 4 months | 0.50% per month |
| 4 months or more | 1.00% per month |
These concessional rates are intended to encourage employers to settle eligible historical disputes rather than continue with prolonged proceedings.
Suppose an eligible PF contribution default is ₹10,00,000 and falls within the applicable category of 0.50% per month for a three-month delay.
The calculation would be:
₹10,00,000 × 0.50% × 3 months = ₹15,000
However, employers should not calculate their final liability solely from an example. The actual settlement amount will depend on the applicable records, default period, contribution amounts, previous payments and EPFO’s determination under the scheme.
No.
This is an important point that employers should understand.
The reduced damages under VISHWAS, 2026 should not be confused with a waiver of the statutory interest liability.
As a pre-condition for availing the scheme, the employer must ensure that the entire applicable interest under Section 7Q of the EPF & MP Act, 1952, or the corresponding provision under the Code on Social Security, 2020, has been fully remitted.
Therefore, before applying, employers should reconcile:
A proper reconciliation is essential before deciding whether to proceed under the scheme.
VISHWAS, 2026 is not a blanket waiver for every PF damages case.
Official information specifically indicates exclusions including cases where damages have already been fully recovered. Cases involving fraud, misappropriation or deliberate falsification of records are also excluded, and the required statutory interest must have been fully remitted.
This means employers should not assume that every old Section 14B matter qualifies.
Eligibility must be assessed based on the actual facts and status of the case.
The VISHWAS, 2026 process is designed to be digital and time-bound.
Employers should generally proceed through the following stages:
Review historical PF defaults relating to periods before 14 June 2024 and identify pending damages/penalty matters.
Establish whether the matter involves:
Review contribution records, payment dates, interest, damages, challans and previous deposits.
The applicable statutory interest must be fully remitted before submitting the application.
The scheme provides for an online application through the EPFO Employer Portal, using the prescribed digital authentication process such as DSC or e-Sign, along with the required documentation.
The concerned EPFO office will verify the application and relevant records.
Once the revised damages are communicated and accepted, the employer must make the required payment within the prescribed timeline.
After the applicable settlement conditions are fulfilled, the matter can proceed toward closure in accordance with the scheme.
Employers should also note that applicants are required to provide an undertaking that they will not pursue further appeal in respect of the dispute settled under the scheme.
VISHWAS, 2026 came into effect on 29 June 2026 and is initially operational for six months.
Therefore, the current six-month window runs until 29 December 2026, subject to any extension permitted under the scheme.
This makes timely assessment important.
Employers with historical PF damages matters should not wait until the final weeks to start reviewing their records. Old cases often involve multiple documents, payment records, notices, orders and recovery proceedings, and determining eligibility may require detailed reconciliation.
If your organisation has old PF damages or Section 14B matters, consider taking the following steps:
1. Prepare a list of all pending PF damages cases.
2. Identify the period of each PF default.
3. Check whether the default relates to a period before 14 June 2024.
4. Review whether a notice or damages order has been issued.
5. Check whether any recovery or litigation is pending.
6. Reconcile the PF contribution and interest payments.
7. Determine the potential benefit available under the reduced damages rates.
8. Review the eligibility conditions before submitting an application.
The key is not simply to apply quickly—it is to apply correctly after understanding the complete compliance position.
PF compliance does not end with monthly contribution filing. Historical defaults, damages notices, inspections, recovery proceedings and statutory audits can create significant administrative and financial challenges for employers.
At Shirke Management Services, we provide professional Labour Law, Payroll, HR and Statutory Compliance solutions to help businesses manage these responsibilities more systematically. Our services include Payroll Processing, Compliance Audit, HRMS Services and Legal Advisory.
For employers reviewing VISHWAS, 2026, professional compliance support can help with:
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VISHWAS, 2026 provides eligible employers with a valuable opportunity to address certain historical EPF damages matters at significantly reduced rates.
But the opportunity is time-bound, and eligibility depends on the specific circumstances of each case.
If your organisation has pending PF damages, Section 14B proceedings, recovery matters or historical PF defaults, this is the right time to review them rather than waiting until the scheme period is close to expiry.
Shirke Management Services can help your organisation review its statutory compliance position and identify the appropriate next steps.
Connect with Shirke Management Services for professional Payroll, Labour Law, Compliance Audit and Statutory Compliance support.
Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. The applicability, eligibility, calculation and settlement of any matter under VISHWAS, 2026 are subject to the applicable government notification, scheme provisions, EPFO directions and the facts of the individual case.
