This page explains a scheme that closes on 28 December 2026. It is general information for employers, not a calculation of your liability. The applicable rate for defaults falling between 14 June 2024 and 30 June 2026 is disputed between two instruments, and should be confirmed before any figure is relied upon.
What it is
A damages settlement, not a contribution waiver
VISHWAS 2026 allows an employer with accumulated damages to settle them at recalculated rates instead of the historical penalty. The distinction matters: the contribution that was due, and the interest on it, remain payable in full. What reduces is the penalty.
Damages under the old section 14B, and now section 128 of the Code on Social Security 2020, are penal rather than automatic — they require a hearing and an assessment of the reason for delay. They have also historically been the largest single component of an old PF demand, which is why a scheme that recalculates them is worth taking seriously.
Why the gap is large
The damages rates were cut, and the cut is retrospective
The historical paragraph 32A table ran from 5% to 25% per annum, depending on the length of the default. EPF Scheme 2026, paragraph 23 replaced it with 0.25% to 1% per month — roughly 3% to 12% a year.
The scheme applies the current rates to pre-14 June 2024 defaults. On a nine-month default of ₹1,00,000 the difference in damages alone is about ₹9,750 before interest. On a large or long-running demand the difference is proportionately larger.
- Contribution arrears — payable in full
- Interest under section 127 — payable in full, at 12% per annum simple
- Damages — recalculated at the current lower rates
- Damages remain capped at 100% of the arrears
- Cases involving fraud or misappropriation are excluded
Who should look at this
Situations where the scheme is worth assessing
Any establishment carrying an unresolved damages demand should at least establish what the position is, because the alternative is to let the demand continue at the old rates. The cases we see most often are these.
- A damages demand or show cause notice received and not yet resolved
- Damages already assessed but not recovered
- A matter pending before a court or tribunal
- Historical defaults from a period when the establishment was managed differently
- A demand inherited through a change of management or a merger
- Interest accruing on a disputed demand that has been left to run
What to do
Establish the position before the window closes
The first step is reconstructing what actually happened — over what period, on what amounts, and what has already been paid or recovered. That history determines both the contribution and interest that must be cleared, and the damages that the scheme would recalculate.
Because interest must be paid in full before a settlement, the practical work is in getting the numbers right rather than in the application itself. An application built on an incorrect default history will not survive scrutiny.
We reconstruct the position from the portal records and the establishment's own filings, quantify each component, and advise on whether applying is worthwhile. Where the demand is disputed on its merits rather than merely old, a settlement application may not be the right route, and we will say so.
Kerala establishments and old damages demands
Damages demands in Kerala are handled through the regional and sub-regional offices, and applications are time-bound. Establishments that changed accountants or payroll systems during the default period often hold incomplete records, which is exactly when reconstruction matters most.
We work with employers across Kerala from our Kottayam office. Where the underlying records are incomplete, we reconstruct from EPFO's own filings and payment history rather than relying on what the establishment retained.
Frequently asked questions
What is the last date for VISHWAS 2026?
The scheme closes on 28 December 2026. It has been stated publicly to be non-extendable, so the working assumption should be that no further window will open.
Does it waive the PF contribution or the interest?
No. Neither the contribution nor the interest under section 127 is waived. Interest must be paid in full before a settlement. Only the damages component is recalculated.
How much can damages reduce by?
It depends on the period of default. The historical rates ran from 5% to 25% per annum; the current rates are 0.25% to 1% per month, roughly 3% to 12% a year. Longer and older defaults see the largest reduction.
Does it cover a matter already pending in court?
The scheme is described as covering damages disputes including matters pending before courts and tribunals, cases where an order has been passed but not recovered, and matters at show cause notice stage. The precise scope should be confirmed against the scheme for your specific proceeding.
What if the demand is wrong on the merits?
Then a settlement application may not be the right route. If the contribution itself was never due, or was already paid, the correct response is to contest the demand rather than settle it. We assess which situation applies before recommending an application.