EPF Scheme 2026: What Changed for Your PF Account

Personal Finance · EPF Scheme 2026 · Quick answer 30 sec · Full read 15 min

What the EPF Scheme 2026 actually is

A change of statute, not a change of benefits. The scheme moves EPF from the 1952 Act to the Code on Social Security, 2020, and modernises administration. Your money, your balance and your UAN carry forward untouched.

The Ministry of Labour & Employment notified the Employees’ Provident Funds Scheme, 2026 vide Gazette Notification G.S.R. 525(E) dated 29 June 2026, under the Code on Social Security, 2020. It came into force on 1 July 2026 and supersedes the Employees’ Provident Funds Scheme, 1952 — a seven-decade-old framework — except in respect of actions already taken under the earlier scheme.

All roughly 8 crore active EPFO members transition automatically. No fresh enrolment is required. Existing balances, membership history and Universal Account Numbers carry forward.

The shift is not merely procedural. The new scheme brings materially stronger digital compliance obligations: electronic filing of returns and ownership disclosures, Aadhaar-linked accounts, e-passbooks and online claim settlement. Three employer-facing transition schemes — EEC 2026, VISHWAS 2026 and AMNESTY 2026 — come into force alongside it to address legacy compliance gaps.

The contribution question, settled

The rate did not change. What changed is that the scheme now states explicitly what the mandatory base is — and for anyone earning above Rs 15,000 basic, that is the part worth reading.

Both employee and employer still contribute 12% of wages, with a concessional 10% continuing for establishments specifically notified by the central government.

What the 2026 scheme clarifies, and this is new, is the mandatory contribution base. Contributions are compulsorily required only up to the statutory wage ceiling of Rs 15,000 a month. At 12%, that is a mandatory Rs 1,800 a month from each side. Any contribution on wages above Rs 15,000 is voluntary and requires employee consent.

In practice this matters if your basic pay exceeds Rs 15,000. If your employer currently deducts PF on your actual basic — say Rs 3,600 on a Rs 30,000 basic — that arrangement continues only while you consent to it. The employer is no longer legally required to match above Rs 1,800 unless the employment contract says so. Members who want a larger corpus can continue through the Voluntary Provident Fund route.

If you earn at or below Rs 15,000 basic, nothing changes at all.

One forward-looking caveat. The Union Cabinet approved raising the wage ceiling from Rs 15,000 to Rs 25,000 on 16 September 2026. The gazette notification giving effect to it has not been published, so the Rs 15,000 figure above remains the operative one for now — we track that separately in the EPF wage ceiling piece.

Three withdrawal categories replace thirteen

Thirteen separate advance categories, each with its own conditions, became three. The paperwork is simpler. The eligibility conditions inside each category did not go away.

Under the 1952 Scheme, a member applying for a partial withdrawal had to navigate thirteen categories — separate heads for illness, higher education, marriage, house purchase, house construction, home loan repayment, renovation and more, each with its own service requirements and limits.

The consolidation reduces paperwork on the EPFO Unified Member Portal and permits multiple withdrawals a year across these categories, replacing earlier restrictions on how many times a member could draw for specific purposes.

Eligibility conditions — minimum service periods, and the purpose the funds are drawn for — continue to apply within each category. The simplification is in the structure of the application, not in the removal of the requirements.

The 100% rule and the 25% floor

The scheme permits withdrawal of up to 100% of your eligible balance. That is not the same as the whole account, and the difference is a hard 25% floor.

This is a broadening from the earlier rules, which set specific percentage caps for many withdrawal types. But the scheme requires members to maintain a minimum balance equal to 25% of total accumulated contributions at all times. The “100% of eligible balance” figure refers to the maximum available within the eligible portion for a given category — not the entire account.

Worked through: if total contributions (employee plus employer, before interest) come to Rs 5,00,000, you must retain at least Rs 1,25,000 after any advance. The remaining Rs 3,75,000 is the maximum drawdown, subject to the purpose limits in whichever category applies.

That retained 25% is also what links to the final-settlement timeline after a job loss, which is the next section and the change most people have not registered.

Leaving a job: 75% now, 25% after twelve months

This is the change that has had the least coverage and affects the most people. Losing your job no longer unlocks the whole corpus in two months.

Under the 1952 Scheme, a member who left employment and stayed unemployed for two months could apply to withdraw the full balance as final settlement.

Under the 2026 Scheme, you can withdraw up to 75% of your balance soon after becoming unemployed. The remaining 25% — the same floor described above — can be withdrawn as final settlement only after 12 months of continuous unemployment.

Three-quarters is accessible early. The final quarter is deliberately held back for a year, to preserve retirement savings and push members toward transferring the balance to a new employer through UAN-linked portability rather than cashing out.

The 12-month wait applies to the final-settlement portion only. It does not restrict partial advances for illness, education or housing, which remain available regardless of employment status subject to the prescribed conditions. Full withdrawal ahead of the 12 months may still be allowed in specific circumstances — retirement after age 55, permanent disability or incapacity, or permanent emigration — subject to EPFO’s conditions.

What employers must do

The immediate obligation is Form V within 15 days of the scheme applying to the establishment. Everything after that is electronic.

Form V is a consolidated return carrying each employee’s Aadhaar number, PAN, UAN, gross wages and EPF-applicable wages. All subsequent reporting — new joiner notifications, exit filings, monthly contribution details, ownership changes — must be submitted electronically.

Employers must also maintain employment records in digital form where applicable and produce them electronically during EPFO inspections. UAN generation, KYC seeding and e-passbook access all sit with the employer.

The damages structure for delayed payment is now codified:

Late filing of statutory returns attracts Rs 500 a day, subject to the prescribed cap.

EEC, VISHWAS and AMNESTY

Three employer-facing transition mechanisms address legacy non-compliance. Each has a defined validity window, and one of them closes on 31 October 2026.

Employees’ Enrolment Campaign 2026 (EEC 2026) runs until 31 October 2026. It lets employers — previously covered or not — enrol employees who joined between 1 April 2009 and 31 March 2026 but were never registered with EPFO, provided they are still on the rolls at the declaration date. For eligible defaults, damages are capped at Rs 100. Employee contributions for the declared historical period are waived where the employer had not previously deducted and retained them; employer contributions plus interest and administrative charges remain due from the declaration date.

VISHWAS 2026 is valid for six months from notification, extendable by a further six. It offers a reduced-damages settlement for contribution defaults relating to periods before 14 June 2024, covering pending damage proceedings, cases under challenge, incomplete recoveries, and matters where notices were issued but final orders are pending. Employers who remit under VISHWAS 2026 can have pending appeals abated.

AMNESTY 2026 is also valid for six months, extendable. It is aimed at exempted establishments and provident fund trusts operating without formal EPFO exemption notifications, including those recognised under the Income Tax Act but never formally exempted under the Code or the repealed 1952 Act. Eligible establishments can regularise as un-exempted retrospectively, or seek continuation as exempted under the Code, subject to compliance and audit requirements.

Tax on withdrawal: the Section 392(7) link

The EPF Scheme 2026 does not change the tax treatment at all. What changed is the section number, because the Income Tax Act changed underneath it.

EPF contributions and interest are exempt while inside the fund, subject to the annual contribution limits. At withdrawal, TDS applies if the accumulated balance is Rs 50,000 or more and the member has served fewer than five continuous years — at 10% where PAN is furnished — at which point the balance may also become taxable.

This was Section 192A of the Income-tax Act, 1961. Under the Income Tax Act, 2025, in force from 1 April 2026, the same provision is carried over unchanged as Section 392(7). The Rs 50,000 threshold, the 10% rate and the five-year continuous-service rule are all identical. These provisions sit in the income tax framework, not in the EPFO rules, which is why the new scheme leaves them alone.

For the full AY 2026-27 picture, including the transition between the two Acts, see the ITR filing rules for salaried filers. For how your interest credit is actually calculated and why yours may read short, see the EPF interest credit date piece. And if you are weighing EPF against the other statutory options, our NPS Tier 1 against Tier 2 comparison and the personal finance guide for salaried India both set out where the marginal rupee is better placed. For housing advances and their interaction with Section 24(b), see the home loan guide.