Source : INDIA TODAY NEWS
The Central government has notified the Employees’ Provident Fund (EPF) Scheme, 2026, replacing the EPF Scheme, 1952, as part of the implementation of the Code on Social Security, 2020. The new scheme came into effect on June 29 after it was notified in the Gazette.
While the overall EPF contribution rules remain largely unchanged, the new scheme brings greater clarity on mandatory contributions, improves digital services and simplifies several processes for both employees and employers.
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Under the new scheme, both employees and employers will continue to contribute 12% of wages towards EPF. The existing 10% contribution rate will continue for establishments notified by the Central government.
The scheme also makes it clear that the mandatory contribution applies only up to the statutory wage ceiling of Rs 15,000 a month. This means the compulsory monthly EPF contribution remains set at Rs 1,800, with employers required to contribute an equal amount. Any contribution above this limit will continue to be voluntary.
MORE FLEXIBILITY FOR EMPLOYEES
According to Adhil Shetty, CEO of BankBazaar, the new rules offer employees greater flexibility in planning their retirement savings.
“Employees contributing above the mandatory limit will have greater flexibility in deciding how much they wish to set aside through EPF, while simpler withdrawal rules could make accessing their savings less cumbersome when the need arises,” he said.
Shetty further added, “Like any financial decision, the choice to contribute more or less should be guided by one’s overall financial goals, current cash flow needs and retirement planning rather than the immediate impact on take-home salary,” he said.
EASIER WITHDRAWALS AND BETTER DIGITAL SERVICES
The EPF Scheme, 2026 also updates the rules for partial withdrawals. Members can continue to withdraw money for medical treatment, education, marriage, buying or building a house and other approved purposes, subject to the prescribed conditions and minimum balance requirements.
The government has also strengthened the digital side of the EPF system. The scheme gives greater importance to electronic filings, online claim settlement, e-passbooks and Universal Account Number (UAN) linkage. These changes are expected to improve transparency, reduce paperwork and make provident fund services faster and more convenient.
With around eight crore active EPFO subscribers, the government hopes the updated scheme will make provident fund management simpler, more efficient and better suited to a digital-first workplace.
– Ends
SOURCE :- TIMES OF INDIA
