Key Insights on the 2026 Employees’ Provident Funds Scheme: Contributions, Withdrawals, and Aadhaar Requirements
The Ministry of Labour and Employment has officially notified the Employees’ Provident Funds Scheme, 2026, replacing the long-standing Employees’ Provident Funds Scheme, 1952. This new scheme is part of the implementation of the Code on Social Security, 2020. While the overall framework remains largely unchanged, the revised scheme introduces modifications related to contributions, benefits, and compliance requirements, along with special amnesty provisions to address past compliance issues.
Puneet Gupta, Partner at People Advisory Services, EY India, stated that the new scheme modernizes the provident fund framework through increased digitalization and simplified processes. It also enhances compliance requirements for both employers and employees. The changes come into effect immediately, allowing members to make partial withdrawals for essential needs such as illness, education, marriage, and housing, subject to certain conditions.
Coverage and Membership
The EPF Scheme, 2026 ensures continuity for all employees previously covered under the 1952 scheme. Employees whose wages exceeded the prescribed ceiling at the time of eligibility will continue to be classified as “excluded employees,” maintaining the existing exclusion criteria. This provision aims to provide clarity and stability for current members transitioning to the new framework.
EPF Contribution
Under the new scheme, both employers and employees are required to contribute 12% of wages to the provident fund. For employees earning above the statutory wage ceiling, mandatory contributions will be calculated only up to that ceiling. Employees have the option to make voluntary contributions on wages exceeding the ceiling or at a higher rate than the mandatory 12%. Employers may also match these voluntary contributions, and either party can reduce or stop these contributions at any time, offering more flexibility in retirement planning.
Withdrawals and Partial Withdrawals
The EPF Scheme, 2026 allows for full withdrawal of funds under specific circumstances, including retirement and permanent migration. Members can also make partial withdrawals for designated purposes such as illness, education, and housing needs, provided they maintain a minimum balance of 25% of their total contributions. This simplification of withdrawal rules aims to enhance accessibility for members in need.
Compliance Requirements
The new scheme introduces a comprehensive compliance framework for employers, detailing one-time, periodic, and event-specific filing obligations. Employers must submit a consolidated return in Form V within 15 days of the scheme’s applicability, including essential information for all employees, such as Aadhaar numbers and gross wages. Clarification is still pending on whether this requirement applies to establishments already covered under the provident fund framework.
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