It is a big relief for the companies running Exempted Provident Fund (PF) Trust that the Employees Provident Fund Organization (EPFO) has started ‘Amnesty Scheme, 2026’ for one time. This scheme allows eligible institutions to regularize the status of their PF trust without facing long-term legal and regulatory hassles.
The amnesty scheme has been implemented from June 29, 2026 and will remain open for six months from the date of notification. Employers running recognized provident fund trusts without formal EPFO exemption can now regularize their status under the one-time amnesty scheme and get relief from pending legal proceedings subject to certain conditions.
The scheme provides six months to eligible employers to regularize their trust status retrospectively and resolve long pending regulatory issues. According to the Ministry of Labor and Employment, this scheme has been brought after the changes made under the Finance Act, 2026. These changes bring the income tax rules relating to recognized provident funds in line with the provisions of the ‘Employees’ Provident Funds and Miscellaneous Provisions Act, 1952′. Going forward, recognition under the Income Tax Act will be given only to those provident funds which are exempted under Section 17 of the EPF Act.
What are PF Trusts?
Provident Fund (PF) Trust is a provident fund managed by the employer. It is made by a company after obtaining exemption from the ‘Employees’ Provident Fund Organization’ (EPFO) under Section 17 of the ‘Employees’ Provident Funds and Miscellaneous Provisions Act, 1952′ (now read with the applicable provisions under the ‘Code on Social Security, 2020’).
Instead of depositing PF contributions with EPFO, the employer manages the employees’ provident fund through an independently run trust. Also, it ensures that the benefits provided to employees are at least as good as those available under the ‘EPF Scheme, 1952’.
PF trusts are generally adopted by large organizations with strong governance and administrative capabilities. Although they work independently, they are still subject to EPFO’s monitoring, periodic audits, inspections and compliance with legal regulations.
Benefits of PF Trust
- Fast settlement of claims: Since the Trust directly administers the funds, withdrawals, transfers, advances and final settlements are often processed faster than the central EPFO system.
- Better Administrative Flexibility: Employers can create efficient internal processes for PF administration, providing better service to employees and faster resolution of complaints while adhering to legal regulations.
- Better governance and monitoring: The employer has direct oversight of the fund administration, which enables strong internal controls, records management and monitoring of compliance.
- Possibility of better investment management: Based on the investment pattern decided by the Central Government and EPFO, the Trusts can manage the investments in a professional manner. However, they are required to pay interest to the employees at a rate which is not less than the annual interest rate declared by EPFO, so that the employees do not suffer any loss.
- Better Employee Experience: Dedicated trust administration often means faster responses to employee queries and more efficient handling of nominations, transfers and benefit claims.
It is important to note that along with the freedom that exempt trusts enjoy, also come greater responsibilities to comply with the rules. They are required to maintain legal records, conduct regular audits, file prescribed returns, follow EPFO instructions and ensure that the benefits available to employees are at least equal to the benefits available under the legal EPF scheme. This is why the recently launched ‘Amnesty Scheme’ is important. It provides an opportunity to those trusts which are operating without formal EPFO exemption, to regularize their position and strengthen compliance with the rules.
Who can apply?
This amnesty scheme is for those institutions which are running Provident Fund Trusts recognized under the Income Tax Act, but do not have any formal exemption notification issued by the Central or State Government. EPFO has said that the detailed procedures, Standard Operating Procedures (SoPs) and Operational Guidelines are available in Part C of the Annexure to the ‘Employees Provident Fund Scheme, 2026’ notified vide Gazette Notification GSR 525(E) dated June 29, 2026. The concerned EPFO regional offices will also help the employers in processing the applications and claims.
According to PIB, this scheme includes two categories:
Category-I: Those institutions which wish to get the Trust regularized retrospectively and which have already started complying with the rules as an un-exempt establishment or which are choosing to comply with the rules as a non-exempt establishment in future.
Category-II: Those institutions which wish to get the Trust regularized retrospectively and which wish to continue functioning as an exempted establishment under the ‘Code on Social Security, 2020’.
Main benefits under EPFO Amnesty Scheme
- The recognition and exemption status of the trust can be given from the inception of the trust till the notified cut-off date.
- Under the ‘Code on Social Security, 2020’, conditions like minimum number of employees, size of corpus and rules for following the rules for 3 years will be relaxed.
- The pending assessments for EPF dues, compensation and interest can be withdrawn and treated as discontinued, provided the employees have received contributions and interest at a rate equal to or better than the statutory EPF rate. Already finalized orders will also be considered invalid ab initio.
What will employers have to do?
- A formal application will have to be submitted to the Central Government through the concerned EPFO Regional Office. They can also send their expression of interest through email at [email protected].
- It must be ensured that the financial accounts of the trust are audited by a chartered accountant.
- Any special or compliance audit specified by EPFO officials will have to be completed within three months of application submission.
Why is EPFO Amnesty Scheme important?
EPFO’s Amnesty Scheme, 2026, acknowledges the long-standing regulatory deficiencies affecting certain exempted provident fund trusts. This provides a one-time opportunity to institutions that are running income tax recognized PF trusts but do not have formal exemption under the EPF framework. They can regularize their position without lengthy legal battles or uncertainty regarding compliance.
Rishi Aggarwal, CEO and co-founder of Teamlease Regtech, says in the FE report that this scheme is very important because it strengthens the regulatory coordination between the income tax framework and the EPF system under the ‘Code on Social Security, 2020′. Eligible institutions may, depending on their circumstances, either pursue compliance as non-exempt institutions or seek a formal exemption under the law. This reduces legal ambiguity and also improves the governance and monitoring of employees’ retirement funds.
Rishi Aggarwal further says that this period of six months should not be seen only as a relief measure for employers running exempt PF trusts, but as an opportunity to comprehensively review the trust’s documentation, exemption status, governance processes, past compliance and digital reporting systems. Organizations that proactively regularize their status will be in a better position to avoid future regulatory disputes and adjust to EPFO’s increasingly technology-based compliance ecosystem.
