Fraud Cases Excluded, But Everything Else Is In: EPFO’s VISHWAS 2026 Scheme Lets Employers Settle Pending EPF Damages Disputes at Lower Rates

On 9 July 2026, the Employees’ Provident Fund Organisation (EPFO) issued a circular announcing the operational rollout of VISHWAS, 2026, a special dispute-settlement mechanism for cases involving damages levied under the Employees’ Provident Funds framework.

This Scheme became effective from 29 June 2026 and will remain in force for six months period.

Key Points:

1. VISHWAS, 2026 has been introduced under the Employees’ Provident Funds Scheme, 2026 (EPF Scheme), which has been framed under the Code on Social Security, 2020.

2. This mechanism forms part of the broader Special Provisions introduced through Paragraph 60 of the EPF Scheme, 2026.

3. The Annexure to Paragraph 60 contains three major initiatives:

   • Employees’ Enrolment Campaign, 2026 — aimed at bringing unenrolled employees into EPF coverage.

   • VISHWAS, 2026 — a special damages settlement mechanism.

   • AMNESTY, 2026 — a regularization framework for exempted establishments and provident fund trusts.

4. The EPFO’s circular operationalises and provides implementation guidance for Part B— VISHWAS, 2026.

5. The primary objective of VISHWAS, 2026 is to facilitate the amicable resolution of disputes relating to damages levied under Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Section 128 of the Code on Social Security, 2020.

6. The initiative seeks to reduce litigation, encourage voluntary compliance, and provide employers an opportunity to settle long-pending disputes involving EPF damages.

7. VISHWAS, 2026 applies to damages related to defaults occurring prior to 14 June 2024 and covers the following categories of cases:

   • Cases where a damages order has been issued and is under challenge before a judicial forum.

   • Cases where a damages order has been issued but the amount remains unrecovered.

   • Cases where a notice has been issued but the final order is yet to be passed.

   • Cases where even the damages notice is yet to be issued.

8. A key feature of VISHWAS, 2026 is the application of reduced damages rates for eligible cases. For defaults occurring before 14 June 2024, the following rates will apply:

   Period of Default	Damage Rate
   Up to 2 months	0.25% per month
   More than 2 months but less than 4 months	0.50% per month
   More than 4 months	1.00% per month

9. Employers seeking settlement under VISHWAS, 2026 must satisfy certain conditions:

   • Full payment of interest payable under Section 7Q of the EPF Act or Section 127 of the Code on Social Security, 2020.

   • Submission of an undertaking that no further appeal or litigation will be pursued after settlement.

   • Compliance with procedural requirements prescribed by EPFO.

10. Upon settlement under VISHWAS, 2026 and fulfillment of the prescribed conditions, pending disputes and appeals relating to damages stand resolved in accordance with the Scheme.

11. The circular also clarifies that:

    • If an establishment has already paid an amount greater than the revised damages calculated under VISHWAS, no refund will be granted.

    • If the amount already paid is less than the revised damages, the differential amount must be paid.

    • Deposits made as pre-deposit for appeals under the earlier EPF Act or the Code on Social Security will be considered while computing liability.

12. The scheme does not apply to:

    • Cases where damages have already been fully recovered.

    • Matters involving fraud, misappropriation, or falsification of records.

    • Cases where the corresponding interest liability has not been fully remitted.

[VISHWAS 2026 Notification, dt. 9-7-2026]