While introducing several changes aimed at simplifying withdrawals, improving digital services and providing greater clarity on employee contributions, the new Employees' Provident Fund (EPF) Scheme, 2026, came into effect on 29 June 2026, which retains the existing 12% provident fund (PF) contribution rate. Although the statutory contribution remains unchanged, the new framework provides greater flexibility for voluntary savings, introduces safeguards to preserve retirement funds, expands withdrawal options for important life events and aims to make provident fund services faster and more accessible through digital platforms.
For most salaried employees, the biggest takeaway is that the mandatory provident fund contribution remains unchanged. Employees and employers will continue to contribute 12% of wages towards EPF. However, the new scheme explicitly states that the compulsory contribution is restricted to the statutory wage ceiling of ₹15,000 per month.
This means the mandatory EPF contribution is capped at ₹1,800 per month each from the employee and the employer, irrespective of how much an employee earns. For instance, an employee earning a basic salary of ₹1 lakh per month will still have a mandatory PF contribution of only ₹1,800 from both the employee and the employer.
If an employee wishes to contribute more than the statutory limit, the additional amount will now be treated as a voluntary provident fund (VPF) contribution. Employers are not required to match these voluntary contributions unless such a provision exists in the company's policy or employment contract. The scheme also allows employees to increase, reduce or discontinue their voluntary contributions depending on their financial circumstances.
The government has clarified that existing EPFO members will continue under the new scheme without any disruption. Employees already covered under the EPF Scheme, 1952, will automatically become members under the EPF Scheme, 2026, and their accumulated provident fund balances will remain fully protected.
The revised scheme also changes the rules governing withdrawals from EPF accounts. Members making partial withdrawals must now maintain a minimum balance of 25% of their eligible EPF balance. In practical terms, if an employee has an eligible balance of ₹1 lakh, at least ₹25,000 must remain in the account, while up to ₹75,000 may be withdrawn, subject to the applicable conditions. The minimum balance requirement applies to both employee and employer contributions.
The list of situations in which employees can make partial withdrawals has also been expanded. Members can continue to withdraw funds for medical treatment, education, marriage, the purchase or construction of a house, the purchase of land, the repayment of home loans, and repairs or renovations of residential property.
The scheme permits withdrawal of up to 100% of the eligible balance for expenses related to illness, education and marriage, subject to the prescribed conditions. Partial withdrawals can now be made after completing 12 months of service and certain special circumstances no longer require detailed explanations from members.
Employees will continue to be eligible to withdraw their entire provident fund balance after retirement or after remaining unemployed for two months, although the revised minimum balance provisions will apply wherever relevant.
Alongside the new scheme, Employees' Provident Fund Organisation (EPFO) is accelerating its digital transformation under the EPFO 3.0 initiative. The automated claim settlement limit has been increased to ₹5 lakh, enabling faster processing of larger claims.
EPFO has also completed testing of a facility that will allow members to withdraw up to 75% of their EPF balance directly into their bank accounts through the unified payments interface (UPI). The organisation is also planning to introduce dedicated EPFO ATM cards that will allow eligible members to access their provident fund savings without requiring employer approval.
In another major digital initiative, EPFO plans to launch member services through WhatsApp within the next month. Subscribers will be able to send a 'Hello' message to the organisation's verified WhatsApp number to check their PF balance, view their last five transactions, track claim status and access services in regional languages.
The EPF Scheme, 2026, is intended to modernise India's provident fund system while preserving existing employee benefits.
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