Summary of this article
EPFO approves one-time amnesty scheme for exempted trusts.
Scheme allows six months to resolve compliance issues.
Over 100 litigation cases expected to be resolved.
The Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO) has approved a one-time amnesty scheme for income tax-recognised trusts that are yet to be covered under or granted exemption under the Employees’ Provident Funds And Miscellaneous Provisions Act (EPF & MP Act), 1952. This is aimed at settling disputes related to EPF coverage and exemption. A decision regarding the same was taken at the 239th meeting of the CBT, which was chaired by Union Labour and Employment Minister Mansukh Mandaviya.
Amnesty Scheme To Address Compliance Issues
The proposed one-time amnesty scheme will be applicable to income tax-recognised trusts that are yet to be brought under or granted exemption under the EPF & MP Act, 1952. This scheme will provide a six-month window for the concerned trusts or establishments to regularise their EPF compliance status.
During this time, they will be granted immunity from damages, interest, and penalties on the condition that they have extended the EPF benefits to employees that are equal to or better than those under the statutory EPF scheme. This scheme also provides relaxation or exemption in certain cases on a retrospective basis, subject to certain conditions.
The scheme has the potential to settle over 100 ongoing legal cases. Thousands of employees working in such establishments could be impacted by the settlement of such cases.
New SOP For EPF Exemption
The CBT has approved a new simplified standard operating procedure (SOP) for the EPF Exemption. The new SOP integrates all the present procedures into one process, which is likely to ease the process for the establishments seeking the exemption.
The new SOP also introduces an end-to-end digital process for the surrender of the exemption and the transfer of the past provident fund (PF) accumulations. The new SOP is likely to bring several steps in the process of seeking the exemption into the digital fold.
Alignment With Social Security Code
The Board has approved the issuance of a notification for new PF, pension, and insurance schemes, which align with the Code on Social Security, 2020.
The new EPF Scheme (2026), EPS (2026), and EDLI Scheme (2026), would replace the existing schemes and would form the basis for the legal framework for the provision of PF, pension, and insurance benefits under the new social security regime.
Pilot For Settlement Of Small Inoperative Accounts
The Board has also approved the pilot for the auto-initiation of the settlement of claims for inoperative EPFO accounts with balances up to Rs 1,000.
The pilot would initially cover 133,000 such accounts with balances aggregating to nearly Rs 5.68 crore. These amounts would be credited to the Aadhaar-linked bank accounts of the members without the need to file new claims.
The facility could be extended to accounts with higher balances in the later stages, depending on the success of the pilot.
EPFO Performance And Interest Rate Decision
During the meeting, the Board also discussed the organisation's operational performance. During FY 2024-25, the organisation received a total of contributions amounting to Rs 3,35,628.81 crore. The organisation also added 286,894 new establishments to the membership rolls.
Over 12.20 million new members have been enrolled during the year. The organisation has also settled over 60.10 million claims. The organisation has served over 8.10 million pensioners.
The Board has recommended an 8.25 per cent rate of interest for the FY 2025-26 on the EPF accumulations. The rate will be formally declared by the government before the rate is credited to the subscribers' accounts.
