Key insights
Deadline: every exempt PF trust must apply to continue its exemption by May 2028, two years from the Social Security (Central) Rules (8 May 2026).
No longer open-ended: exemption is now granted for three years at a time, with renewal due at least six months before expiry.
The size test comes first: a trust needs at least 500 contributory members and ₹50 crore in members’ accounts. A trust below either line must apply for surrender.
Approval takes time: EPFO approval averages eight to twelve months, and Income Tax approval of amended Trust Rules can take six to eight months more.
Start now: a feasibility study shows whether continuing or surrendering makes better sense. Separately, Amnesty 2026 for unexempted trusts closes on 28 December 2026.
Picture a CFO at a mid-sized manufacturing company in Pune, three weeks before the audit committee meets. The HR head has sent her a board note with one line highlighted: the company’s provident fund trust, running since 1994, must now apply afresh for exemption. Her first reaction is fair. The trust has been exempt for more than thirty years, so why ask again?
The second reaction comes after she reads the new conditions. The trust has 410 contributory members and a corpus of about ₹38 crore. The company is imaginary. The numbers are the kind that make a CFO read a page twice.
What the Scheme now says
The Employees’ Provident Funds Scheme, 2026 was notified on 29 June 2026 under the Code on Social Security, 2020. Establishments holding an exemption under the old EPF Act must apply for continuation within two years from the date the Social Security (Central) Rules are notified. Those Rules came on 8 May 2026, so the last date to apply is in May 2028.
Exemption has also changed character. It is no longer open-ended. It is granted for an initial three years, and the renewal application goes in at least six months before expiry. For the wider changes for employers, see our guide to the EPF Scheme, 2026.
Area | What is expected |
Size | At least 500 contributory members on the date of application, and a cumulative balance of ₹50 crore or more in members’ accounts |
Financial standing | Positive net worth in each of the last three years before applying |
Member records | Aadhaar seeded for all members |
Member services | Online claim settlement and grievance resolution within 90 days of grant |
Interest | Declared annually, in line with the income earned, and not more than 200 basis points above the rate declared by the Central Government |
The size test deserves attention first, because it decides everything after it. A trust with fewer than 500 contributory members, or less than ₹50 crore in members’ accounts, does not qualify to continue. It has to apply for surrender by May 2028, and if it does not, the Regional PF Commissioner may issue a surrender notification. Regional offices have already begun writing to exempt establishments for their number of contributory members and corpus, so the figures are already being collected.
Surrender means the accumulations, surplus, reserves and employee balances move to EPFO, and the company complies as an un-exempted employer. For some companies that will come as a relief. A trust must match the interest rate declared by the Government, and any shortfall is met by the company. Under the Scheme, any loss to the trust from fraud, defalcation or wrong investment decisions has to be made good by the employer, and principal or interest losses must be recouped within two months of the loss or the end of the financial year, whichever is earlier. Many finance heads will want that sentence read out in the board room.
Why begin before you must
The application does not go to one office. It moves from the Regional PF Commissioner to the Zonal office, then to EPFO head office, where the Exempted Establishments Committee and the Central Board of Trustees take it up. The appropriate Government notifies the outcome only after that. EPFO decides when its Board meets, and every hand-over depends on officers working through electronic files. Eight to twelve months is our average, and individual cases run longer.
A continuing trust has a second track. Its Trust Rules need amending to match the new Scheme, and the amended Rules must be approved by the Income Tax Department, which can take six to eight months on its own.
The Scheme sets a date for applying. Approval comes on EPFO’s timetable. A trust that starts in early 2028 will be filing in a hurry, with Rule amendments and Income Tax approval still pending. In our view, the size test is the first call to make, well before anyone spends a rupee on drafting.
A sensible order of work
Feasibility study: map the trust against the conditions, check the size test, and compare the cost of continuing with the cost of surrender.
Gap closure: fix what is missing and, if continuing, amend the Trust Rules.
Filing: the re-exemption or surrender application with EPFO, and the revised Trust Rules with the Income Tax Department.
Follow-up: liaison with the Regional office, Zonal office and EPFO head office until approval.
One related date. Trusts that hold Income Tax recognition but never received a formal exemption have until 28 December 2026 to seek regularisation under Amnesty 2026, unless EPFO extends the window.
Our team has handled more than 75 exemption assignments and over 50 surrenders. If your trust sits close to the 500-member or ₹50 crore line, or you are unsure which of the conditions it meets, we would be glad to run a feasibility study and tell you plainly whether continuing or surrendering makes better sense. Write to us at [contact email] and we will take it from there.
Want the full picture of the new EPF rules? Watch our webinar: Navigating EPF Scheme, 2026.
Frequently asked questions
1. Does every exempt PF trust have to reapply under the EPF Scheme, 2026?
Yes. Establishments holding an exemption under the old EPF Act must apply for continuation within two years from the date the Social Security (Central) Rules were notified (8 May 2026). The last date to apply is in May 2028.
2. How long does an exemption last now?
Exemption is no longer open-ended. It is granted for an initial three years, and the renewal application must be filed at least six months before it expires.
3. What is the size test for a PF trust?
A trust needs at least 500 contributory members on the date of application and a cumulative balance of ₹50 crore or more in members’ accounts. A trust that falls short on either does not qualify to continue.
4. What other conditions must a trust meet?
Positive net worth in each of the last three years, Aadhaar seeding for all members, online claim settlement and grievance resolution within 90 days of grant, and interest declared in line with income earned, not more than 200 basis points above the Central Government rate.
5. What happens if a trust does not meet the conditions?
It has to apply for surrender by May 2028. If it does not, the Regional PF Commissioner may issue a surrender notification. On surrender, the accumulations, surplus, reserves and employee balances move to EPFO, and the company complies as an un-exempted employer.
6. How long does approval take?
The application moves from the Regional PF Commissioner to the Zonal office and then to EPFO head office, where the Exempted Establishments Committee and the Central Board of Trustees take it up. In our experience this takes eight to twelve months on average. Amending the Trust Rules and getting Income Tax approval can take another six to eight months.
7. What is Amnesty 2026?
It covers trusts that hold Income Tax recognition but never received a formal exemption. They have until 28 December 2026 to seek regularisation, unless EPFO extends the window.
8. Where should a company start?
With a feasibility study. It maps the trust against each condition, checks the size test, and compares the cost of continuing with the cost of surrender, so the board can decide early.