VISHWAS 2026 to settle PF penalty disputes: Who benefits from scheme
New Delhi, Jul 14, 2026
The six-month EPFO scheme offers eligible employers a chance to settle PF penalty cases at lower damages
The Employees’ Provident Fund Organisation (EPFO) has rolled out VISHWAS 2026, a one-time dispute resolution scheme that allows eligible employers to settle pending provident fund (PF) penalty cases by paying significantly lower damages than those prescribed under the law. The move is aimed at reducing long-pending litigation while encouraging employers to clear outstanding dues.
The scheme will be open for six months from June 29 and applies to disputes related to damages imposed under Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, or Section 128 of the Social Security Code, 2020.
According to an EPFO circular issued on July 9, the scheme offers concessional damages in eligible cases, provided employers first pay the full interest due and agree not to pursue any further legal proceedings after settlement.
What is VISHWAS 2026?
VISHWAS 2026 is a special settlement scheme designed to resolve disputes over penalties imposed on employers for delayed remittance of EPF contributions.
Under the EPF law, employers are required to deposit employees’ provident fund contributions within the prescribed timelines. Delays can attract two separate financial liabilities:
• Interest on delayed payment under Section 7Q of the EPF Act (or Section 127 of the Social Security Code).
• Damages or penalties under Section 14B of the EPF Act (or Section 128 of the Social Security Code).
While interest remains payable in full, the new scheme allows eligible employers to settle the penalty component at substantially reduced rates.
The initiative is expected to ease the burden on businesses that have unresolved EPF disputes while helping the EPFO recover pending dues without prolonged litigation.
Which cases are covered?
The scheme covers a wide range of pending cases involving delayed EPF contributions. Employers may apply if their case falls under any of the following categories:
• Cases pending before a court or tribunal after a damages order has already been passed.
• Cases where a final damages order exists but recovery has not been completed.
• Cases where EPFO has issued a show-cause notice but the final order is yet to be passed.
• Cases where no notice has been issued yet, even though delayed remittance has occurred.
This broad coverage means employers can seek settlement even before formal adjudication begins in certain cases.
Concessional penalty rates
For delays that occurred before June 14, 2024, damages will be calculated at concessional monthly rates under the scheme:
• 0.25% per month for delays of up to two months.
• 0.50% per month for delays of more than two months but less than four months.
• 1% per month for delays exceeding four months.
These rates are substantially lower than the normal damages that may otherwise be imposed under the EPF law.
Scheme conditions
Employers cannot simply opt for reduced damages. Certain mandatory conditions must be fulfilled before an application is accepted.
These include:
• Payment of 100 per cent of the applicable interest under Section 7Q before applying.
• Submission of an online application through the EPFO Employer Portal.
• Authentication using a Digital Signature Certificate (DSC) or e-signature.
• A written undertaking that no appeal or fresh legal proceeding will be filed after the dispute is settled.
• Payment under the scheme within 15 days of approval by the competent authority.
After verification by the concerned regional office, an approval certificate will be made available in the employer's login.
Which cases are not eligible?
The scheme does not apply in every situation. EPFO has specifically excluded:
• Cases where damages have already been fully recovered.
• Cases involving fraud, embezzlement or deliberate falsification of records.
• Cases where the employer has not paid the entire interest amount before applying.
• Employers falling under these categories will have to continue under the existing legal process.
What happens to pending litigation?
One of the primary objectives of VISHWAS 2026 is to reduce litigation between employers and the EPFO.
Once a settlement is approved under the scheme, the employer must withdraw or discontinue any appeal relating to the dispute and cannot initiate fresh proceedings over the same dues. The EPFO will also take steps for disposal or withdrawal of pending matters wherever applicable.
EPFO to set up dedicated help desks
To ensure smooth implementation, EPFO has said every regional office will establish a VISHWAS Cell and help desk to assist employers. Regional offices will also conduct regular reviews to monitor the scheme's progress and ensure timely disposal of applications.
Lokesh Gupta, the regional provident fund commissioner-I, has urged employers to make use of the scheme, saying it provides an opportunity to resolve long-pending penalty disputes quickly through a conciliatory process while reducing the burden of litigation for both employers and the EPFO.
For employers with unresolved EPF penalty disputes, VISHWAS 2026 offers a limited-time opportunity to settle cases at lower cost, provided they clear the outstanding interest and meet the scheme's eligibility conditions. The scheme is expected to improve compliance while helping both businesses and the EPFO avoid lengthy legal proceedings.
[The Business Standard]
