EPFO to continue 8.25% interest rate on PF deposits with several schemes for 2025-26

The Employees’ Provident Fund Organization (EPFO) as per the official order issued, has approved to retain an interest rate of 8.25% on Employees’ Provident Fund (EPF) deposits for 2025-25 for the second consecutive year.

The decision was taken at the 239th meeting of the Central Board of Trustees (CBT) held in New Delhi. The EPF interest on deposits is calculated on a monthly balance but is credited to subscribers’ accounts at the financial year end. Accounts however, that are remain inactive for 36-months are classified as dormant with no further interest. EPFO has maintained a strong financial activity despite global economic turbulence while ensuring stable and competitive returns without interest rates draining.

The Board in line with the continuous reform initiatives has also approved a one-time Amnesty Scheme to counter the compliance issues relating to income tax recognised trusts that are yet to be covered under or granted exemption under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF & MP Act) as per the provisions of the Finance Act, 2026.

The proposed scheme will bring such establishments and trusts into compliance within a defined six-month window and it seeks to protect workers’ interest by waiving damages, interest, and penalties for those who have already provided benefits equal to or better than the statutory scheme.

This measure will likely to resolve over 100 active litigation cases in line with others thereby and meanwhile benefiting thousands of trust members, and this would be applied to exempted establishments that have complied with the provisions of the EPF & MP Act.

A simplified Standard Operating Procedure (SOP) on EPF exemptions has been also approved by the board. The revised SOP consist of four existing SOPs and the Exemption Manual into a single comprehensive framework aimed at reducing the compliance burden.

The new framework introduces an end-to-end digital process for the surrender of exemptions and transfer of past accumulations, enhancing transparency and efficiency in auditing exempted establishments. The unified system is expected to promote ease of doing business through technology-driven governance. In addition, the CBT approved the notification of new social security schemes to align with the Code on Social Security, 2020, ensuring a seamless transition from the existing framework.

The newly approved Employees’ Provident Fund Scheme, 2026, Employees’ Pension Scheme, 2026, and Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026 will replace the current schemes, legally in order to provide foundation for administering provident fund, pension and insurance benefits in the coming years.