The Employees’ Provident Fund Organisation (EPFO) has launched “VISHWAS, 2026”, a one-time initiative for settlement of disputes relating to levy of damages or penalties through a digital and time-bound process.
The scheme was notified on June 29 and will remain operational for six months.
“VISHWAS, 2026 has been introduced with the objective of promoting voluntary compliance, reducing litigation, and enabling speedy resolution of long-pending disputes relating to penalty/damages while safeguarding the interests of employees,” the labour ministry said in a release.
Penalties for defaults pertaining to the period prior to June 14, 2024 will be recalculated at a lower rate of 0.25% per month for defaults up to two months, 0.50% per month for defaults from two to less than four months, and 1% per month for defaults exceeding four months. “These concessional rates are intended to encourage employers to resolve pending disputes expeditiously,” the ministry said.
The scheme covers four broad categories of cases: cases where orders for penalty/damages are under challenge before judicial forum; final damages/penalty orders where recovery is pending or only partly made, including Recovery Certificate (RRC) cases; cases where notices have been issued but final orders for damages/penalty are yet to be passed; and cases where notices for penalty/damages are yet to be issued.
Disclaimer: This article is based on a recent ITAT Pune ruling in a specific case. Judicial decisions are fact-specific, and their applicability depends on individual circumstances. Taxpayers should seek professional advice before relying on this ruling for their own cases.
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