The Employees’ Provident Fund Organisation (EPFO) has introduced VISHWAS 2026, a one-time scheme that allows employers to settle long-pending disputes over PF damages.
These damages are penalties imposed when employers delay depositing EPF contributions. They are levied under Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, or Section 128 of the Code on Social Security, 2020.
Under the scheme, eligible employers can settle pending damage cases by paying reduced damages instead of the amount otherwise payable, provided they satisfy the conditions laid down by EPFO.
The scheme has been introduced to resolve old disputes, reduce litigation and help recover pending dues without prolonged legal proceedings. The scheme is valid for six months from 29 June 2026.
Who can apply?
An employer can apply under VISHWAS 2026 if the dispute is still pending at any stage. This includes cases where a damages order has already been passed and the matter is pending before a court or tribunal, or where a final damages order has been issued but recovery is yet to be completed.
It also covers cases where a show-cause notice has been issued but the final order on damages hasn’t come through yet, as well as cases where remittance was delayed but no show-cause notice has been issued at all. Whatever the situation, the scheme applies only to disputes over damages under Section 14B of the EPF Act or Section 128 of the Code on Social Security, 2020.
How can employers apply?
Employers must submit an application through the EPFO Employer Portal and authenticate it using a Digital Signature Certificate (DSC) or e- sign.
“When applying, employers are required to pay the entire interest payable under Section 7Q of the EPF Act or Section 127 of the Code on Social Security, 2020, before submitting the application,” said Rishi Agrawal, Ceo and co-founder of Teamlease Regtech.
As part of the application, employers must update their PAN, email ID and mobile number if these details have not already been updated. They also need to provide details such as the period of default, the reference order, the damages levied and any damages already paid, along with proof of payment of interest and damages, wherever applicable.
In addition, employers must declare that the interest for the relevant period has been fully deposited, select the applicable case category, and give an undertaking that no further appeal or proceeding will be filed once the dispute is settled. After the application is approved, the amount payable under the scheme must be paid within 15 days from the date of approval.
After EPFO completes its verification and grants approval, the digitally signed settlement certificate is made available in the employer’s login.
Key conditions to settle PF disputes
To settle a PF dispute under this scheme, an employer needs to meet a few key conditions. First, the entire interest payable under Section 7 Q or Section 127 must be fully remitted before the application is even submitted.
Along with that, the employer has to submit a formal undertaking stating that no further appeal will be filed before any judicial or quasi-judicial forum once the dispute is settled under VISHWAS 2026.
The application itself must be submitted online through the EPFO Employer Portal and authenticated using a DSC or e-sign, and once the scheme determines the settlement amount, it has to be paid within 15 days of approval.
Who cannot avail the VISHWAS 2026 scheme?
Not every case is eligible under VISHWAS 2026.
“The scheme does not cover establishments where the damages have already been fully recovered, as there is no outstanding dispute left to settle. It also excludes cases involving fraud, misappropriation or deliberate falsification of records,” commented Agrawal.
In addition, employers who have not fully remitted the interest under dispute cannot avail of the scheme.
These categories of cases will continue to be dealt with under the existing legal framework and are not eligible for settlement under VISHWAS 2026.
Rate of penal damages under EPFO Vishwas, 2026
The EPFO VISHWAS 2026 scheme is designed exclusively for past defaults. Its benefits apply only to delays or defaults that occurred before June 14, 2024, which serves as the key cut-off date.
Under the scheme, penal damages are recalculated at concessional flat rates based on the duration of the default: 0.25% per month for delays of up to two months, 0.50% per month for delays of more than two months but up to four months, and 1% per month for defaults exceeding four months.
Pending tax disputes? Here’s what the scheme says
Once the employer opts for settlement under VISHWAS 2026, they must submit a formal undertaking stating that no further appeal will be filed before any judicial or quasi-judicial forum in respect of the same dispute after it is settled under the scheme.
This undertaking is a mandatory requirement for availing of VISHWAS 2026. Without it, the employer cannot settle the dispute under the scheme, according to Agrawal.
What happens to part payments?
Where an employer has already paid part of the damages, EPFO will recalculate the damages at the concessional rates prescribed under the scheme.
If the amount already paid is more than the revised damages, no refund will be granted, and the excess amount cannot be adjusted against any order or notice issued under Section 14B of the EPF Act or Section 128 of the Code on Social Security, 2020, for the same period of delay.
If the amount already paid is less than the revised damages calculated under the scheme, the employer will have to pay the differential amount to settle the dispute under VISHWAS 2026.
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.
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