The Centre has notified a new Employees' Provident Funds Scheme, 2026, replacing the seven-decade-old 1952 framework that governed retirement savings for India's salaried workforce. The new rules, which took effect from June 29, 2026, introduce sweeping changes to withdrawals, nominations, claim settlements and employer compliance. We enlist some of the important ones for you.
Easier access to PF savings
The biggest relief for employees is ease of premature withdrawals.
The new scheme replaces the earlier maze of withdrawal limits with a single concept — the Eligible Member Balance, defined as the total PF balance after maintaining a mandatory minimum balance equal to 25% of total contributions, including employer and employee contributions and interest.
After completing 12 months of membership, subscribers can withdraw up to 100% of their Eligible Member Balance for specified purposes. Withdrawals for medical treatment of self or family can be made any number of times, while members can withdraw up to 10 times during their career for education and five times each for marriage, or for buying, constructing or renovating a house. Employees leaving service before completing a year can also withdraw their eligible balance.
Retirement and interest rules
The rules for final settlement remain largely unchanged. Full withdrawal is permitted after retirement at 55 years of age, permanent disability, migration abroad for employment or settlement, or retrenchment. Members suffering from tuberculosis, leprosy or cancer continue to be treated as permanently incapacitated.
The government will continue to notify the annual EPF interest rate. A new safeguard ensures that if the interest rate in the year of withdrawal is lower than the previous year's rate, the difference will be credited as a bonus, protecting members from losing returns because of timing.
Faster claims, stricter accountability
The scheme mandates that PF claims be settled within 20 days of receiving a complete application. If the EPFO misses the deadline without sufficient cause, penal interest at 12% per annum will be payable, with the amount recoverable from the salary of the responsible commissioner rather than from the provident fund itself. Any deficiencies in claims must also be communicated within the same 20-day period.
Fresh nominations required
The new rules also overhaul the nomination process. Existing nominations made under the 1952 scheme will become invalid where they conflict with the new provisions, requiring members to file fresh e-nominations. Importantly, any nomination made before marriage automatically becomes void after marriage, making it mandatory for newly married members to submit a fresh nomination. Where a member has a family, nominations can only be made in favour of family members.
Amnesty for uncovered workers
The notification also launches the Employees' Enrolment Campaign, 2026, valid until October 31, 2026. It allows employers to enrol workers who joined between April 1, 2009, and March 31, 2026, but were never registered with EPFO.
Employers will only have to deposit their own share of past contributions, while the employee's share will be waived if it was never deducted from wages. Instead of hefty damages, employers will pay a nominal Rs100 per declaration, along with applicable interest.
The scheme also introduces a graded penalty structure for delayed employer contributions—0.25% per month for delays below two months, 0.5% for delays of two to four months, and 1% per month thereafter—replacing the flat 1% monthly penalty introduced in 2024.