EPFO launches VISHWAS, 2026 for one-time settlement of damages or penalty disputes

The Employees’ Provident Fund Organisation (“EPFO”) has launched VISHWAS, 2026, a one-time dispute resolution scheme to facilitate the amicable settlement of disputes relating to levy of damages and penalty under Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Section 128 of the Code on Social Security, 2020. The Scheme has been notified as part of the EPF Scheme, 2026 and has come into force with effect from 29^th June 2026. It will remain operational for 6 months from the date of notification, i.e., until 29^th December 2026.

Key Highlights:

1. The Scheme aims to promote voluntary compliance, reduce litigation and enable expeditious resolution of long-pending damages/penalty disputes through a transparent, fully digital and time-bound mechanism.
2. The Scheme covers the following categories of cases:

• cases where damages/penalty orders are under challenge before any judicial forum;
• final damages/penalty orders where recovery is pending or has been made only partially, including Recovery Certificate (RRC) cases;
• cases where show cause notices have been issued but final damages/penalty orders are yet to be passed; and
• cases where notices for levy of damages/penalty have not yet been issued.

3. Under the Scheme, damages/penalty relating to defaults occurring prior to 14 June 2024 will be recalculated at concessional rates as follows:

• 0.25% per month for defaults up to two months;
• 0.50% per month for defaults exceeding two months but less than four months; and
• 1.00% per month for defaults of four months or more.

4. To avail the Scheme, employers must ensure that the entire statutory interest payable under Section 7Q of the EPF & MP Act, 1952 or Section 127 of the Code on Social Security, 2020, as applicable, has been fully paid before submitting the application. Applicants are also required to furnish an undertaking that no further appeal will be pursued in respect of the dispute settled under the Scheme.

5. Provides for adjustment of amounts already paid towards damages/penalty, treatment of statutory pre-deposits made for filing appeals and settlement of pending cases. However, it does not apply to cases where damages/penalty have already been fully recovered, cases involving fraud, misappropriation or deliberate falsification of records, or cases where the applicable statutory interest has not been fully deposited.

6. Applications are required to be submitted online through the EPFO Employer Portal using a Digital Signature Certificate (DSC) or e-Sign. EPFO has also issued operational guidelines and directed the establishment of dedicated VISHWAS Cells across its field offices to facilitate processing and timely disposal of applications.

Source: PIB