On 29 June 2026, the Ministry of Labour and Employment notified the Employees' Deposit-Linked Insurance (EDLI) Scheme, 2026. It replaces the 1976 scheme and brings deposit-linked insurance under the Code on Social Security, 2020. Here's what you need to know, without the legal jargon. What is EDLI? EDLI is automatic life insurance for every EPF member. If an employee dies while in service, their nominee or legal heir receives a lump sum between ₹2.5 lakh and ₹7 lakh. The employee pays nothing. It's fully employer-funded at 0.5% of wages, capped at the ₹15,000 monthly wage ceiling. The 13 key changes under EDLI 2026 1 Replaces the 1976 Scheme Entirely All future compliance, contributions, exemptions, and claims follow the 2026 framework. Existing rights and pending claims from before 29 June 2026 remain protected under the old rules. 2 Employer Contribution Stays at 0.5% The rate remains 0.5% of wages (basic + DA), capped at ₹15,000/month, so a maximum of ₹75 per employee each month. It cannot be recovered from employee wages, and future rate changes will follow actuarial valuation. 3 Revised Assurance Benefit Structure The benefit is linked to the average PF balance over the preceding 12 months (or the membership period, whichever is shorter): Up to ₹50,000 of average balance, paid in full Balance exceeding ₹50,000 → 40% payable, capped at ₹1 lakh Additional 20% enhancement as per paragraph 21(5) Minimum assured benefit: ₹50,000 (even for members with under 1 year of service) Overall minimum: ₹2.5 lakh | Overall maximum: ₹7 lakh 4 6-Month Service Eligibility Employees who die within 6 months of the last PF contribution are eligible, provided they remain on the employer's rolls. This is a defined condition, not discretionary. 5 60-Day Employment Gap Ignored A gap of up to 60 days between two jobs is ignored when calculating continuous service. 6 EPF Nomination Auto-Applies to EDLI No separate EDLI nomination is needed; the EPF nomination carries over automatically. If no valid nomination exists, payment goes to the eligible family or legal heirs. 7 Hard 20-Day Claim Settlement Deadline Complete claims must be settled within 20 days. Delays attract 12% p.a. penal interest, recoverable from the concerned Commissioner's salary. Claims can be filed online or offline. 8 Electronic Compliance Now Mandatory The following are now scheme-level statutory obligations, not just portal practice: Electronic payment of contributions within 15 days of month close Monthly upload of new members and exits on the portal Maintenance of electronic records, open to inspection Digital processing of claims and nominations 9 Penalties for Non-Compliance Damages range from 0.25% to 1% of arrears per month based on default duration. Late electronic filing attracts ₹500/day, capped at the month's admin charges. 10 Structured Exemption Framework Employers opting for private group insurance over statutory EDLI must hold an IRDAI-approved policy with better benefits, majority employee approval, and monthly online returns. Exemption is valid for 3 years, with the renewal application due 6 months before expiry. A lapsed exemption triggers immediate statutory EDLI compliance with retrospective liability risk. 11 Ownership Return Display Employers must now display ownership return extracts at the establishment entrance and on the company website. 12 Transitional Relief Schemes Three time-bound windows are open for regularising past compliance gaps: Employees' Enrolment Campaign, 2026 → Closes 31 October 2026 VISHWAS, 2026 → For resolving pending disputes AMNESTY, 2026 → For clearing past gaps without full penalties 13 EDLI Payout Remains Tax-Free The entire amount received by the nominee or legal heir is exempt from income tax. What this means for you as an employer The benefit hasn't shrunk, but your accountability has grown. In practice, that means: Tighter deadlines: Contributions must be paid within 15 days, and claims settled within 20, both now carrying penalties for delay. Mandatory digital filing: Monthly member and exit uploads and electronic records are statutory, and open to inspection. Clean nomination data: EPF nominations now drive EDLI payouts, so outdated or missing records directly affect employees' families. Exemptions on the clock: If you run private group insurance, check your IRDAI approval and renewal date before it lapses. A closing window: The Enrolment Campaign, VISHWAS, and AMNESTY schemes let you fix past gaps, but only until they close from October 2026. For most employers, the real risk isn't the scheme itself. It's the quiet gaps: an outdated nomination, a missed upload, an exemption due for renewal, easy to overlook until a claim or inspection surfaces them. Don't wait for a claim or an inspection to find the gap. Between the 15 day filing deadline, mandatory digital uploads and exemption renewals, a missed step carries real penalties. And the relief windows to fix past gaps start closing October 2026. 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