In a major relief for companies running exempted provident fund (PF) trusts, the Employees’ Provident Fund Organisation (EPFO) has rolled out a one-time Amnesty Scheme, 2026.
The scheme allows eligible establishments to regularise their PF trust status without facing prolonged legal and compliance hurdles.
The Amnesty Scheme has been notified with effect from June 29, 2026, and will remain open for six months from the date of notification.
Employers running recognised provident fund trusts without formal EPFO exemption can now regularise their status under a one-time Amnesty Scheme and receive relief from pending legal proceedings, subject to conditions.
The scheme offers eligible employers a six-month opportunity to regularise their trust status retrospectively and resolve long-pending compliance issues.
According to the Ministry of Labour and Employment, the scheme follows changes introduced through the Finance Act, 2026, which align the income tax framework governing recognised provident funds with the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
Going forward, recognition under the Income Tax Act will be available only to provident funds that have obtained exemption under Section 17 of the EPF Act.
What are PF trusts?
A Provident Fund (PF) Trust is an employer-managed provident fund established by a company after obtaining exemption from the Employees’ Provident Fund Organisation (EPFO) under Section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (now read with the provisions carried forward under the Code on Social Security, 2020).
Instead of depositing PF contributions with the EPFO, the employer manages employees’ provident fund accumulations through an independently governed trust, while ensuring that employees receive benefits that are at least as favourable as those provided under the EPF Scheme, 1952.
PF trusts are typically adopted by large organisations with strong governance and administrative capabilities. Although they operate independently, they remain subject to EPFO oversight, periodic audits, inspections, and statutory compliance requirements.
Benefits of PF Trusts
From a business and employee perspective, exempted PF trusts offer several advantages:
- Faster settlement of claims: Since the trust administers the fund directly, withdrawals, transfers, advances, and final settlements are often processed more quickly than through the central EPFO system.
- Greater administrative flexibility: Employers can design efficient internal processes for PF administration, resulting in better employee service and quicker grievance resolution while remaining compliant with statutory requirements.
- Closer governance and oversight: The employer has direct visibility over fund administration, enabling stronger internal controls, record management, and compliance monitoring.
- Potential for better investment management: Subject to the investment pattern prescribed by the Central Government and EPFO, trusts can professionally manage investments. However, they are mandatorily required to credit interest to employees at a rate that is not lower than the EPFO-declared annual interest rate, ensuring employees are not disadvantaged.
- Improved employee experience: Dedicated trust administration often translates into quicker responses to employee queries and more efficient handling of nominations, transfers, and benefit claims.
It is important to note that the autonomy enjoyed by exempted trusts comes with significant compliance responsibilities.
They must maintain statutory records, undergo regular audits, file prescribed returns, comply with EPFO directions, and ensure that employee benefits remain at least equivalent to those available under the statutory EPF Scheme.
This is precisely why the recently introduced Amnesty Scheme is significant; it provides an opportunity for trusts operating without formal EPFO exemption to regularise their status and strengthen regulatory compliance.
Who can apply?
The Amnesty Scheme is meant for establishments that have been operating a provident fund trust recognised under the Income Tax Act but do not possess a formal exemption notification issued by the Central or State Government.
EPFO said detailed procedures, standard operating procedures (SoPs) and operational guidelines are available under Part C of the Annexure to the Employees’ Provident Fund Scheme, 2026, notified through Gazette Notification GSR 525(E) dated June 29, 2026. Jurisdictional EPFO Regional Offices will also assist employers with the application and processing of claims.
According to PIB, the scheme covers two categories:
Category–I: Establishments seeking retrospective trust regularization that have already started compliance as an un-exempted establishment or are opting for prospective compliance as an un-exempted establishment.
Category–II: Establishments seeking retrospective trust regularization that choose to continue operating as exempted establishments under the Code of Social Security, 2020.
Key benefits under the EPFO Amnesty scheme
Eligible establishments can avail several compliance-related reliefs, including:
Trust recognition and exemption status may be granted from the inception of the trust up to the notified cut-off date.
Requirements relating to minimum employee strength, corpus size, and the 3-year prior compliance rule under the Code on Social Security, 2020, will be waived.
Pending assessments for EPF dues, damages and interest may be withdrawn and treated as abated, provided employees received contributions and interest at rates equal to or better than the statutory EPF rate. Finalised past orders will also be treated as void from the beginning.
What do employers need to do?
To avail the scheme, eligible employers must:
- Submit a formal application to the Central Government through the concerned EPFO Regional Office.
- They may also send an expression of interest via email to rc.exemption@epfindia.gov.in.
- Ensure that the trust’s financial accounts are audited by a Chartered Accountant.
- Complete any special or compliance audit directed by EPFO authorities within three months of submitting the application.
Why does the EPFO Amnesty Scheme matter?
The EPFO’s Amnesty Scheme, 2026, acknowledges a long-standing regulatory gap affecting certain exempted provident fund trusts.
It provides a one-time opportunity for establishments that have been operating Income Tax-recognised PF trusts but lack formal exemption under the EPF framework to regularise their status without prolonged litigation or compliance uncertainty.
“The scheme is quite significant because it strengthens regulatory alignment between the Income Tax framework and the EPF regime under the Code on Social Security, 2020. Eligible establishments can either transition to compliance as un-exempted establishments or seek formal exemption under the law, depending on their circumstances. This reduces legal ambiguity while improving governance and oversight of employee retirement funds,” said Rishi Agrawal, CEO and Co-founder of Teamlease Regtech.
“The six-month window should not be viewed merely as a relief measure for employers operating exempted PF trusts but as an opportunity to comprehensively review trust documentation, exemption status, governance processes, historical compliances and digital reporting systems. Organisations that proactively regularise their position will be better placed to avoid future regulatory disputes and align with EPFO’s increasingly technology-driven compliance ecosystem,” Rishi Agrawal further added.
The scheme reinforces the broader policy objective of improving ease of doing business while safeguarding employees’ social security benefits through greater regulatory certainty.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors should assess their financial goals, risk appetite and consult a qualified financial advisor before making investment decisions.