ESIC Amnesty Scheme 2025: Deadline 30 September 2026 for ESI Dues
ESIC's Amnesty Scheme 2025 lets employers settle outstanding ESI contributions, interest and litigation while getting Section 85B damages waived. The window closes 30 September 2026 — here's who qualifies and how to apply.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Employees' State Insurance Act, 1948 — Effective: 1 October 2025 to 30 September 2026. Source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2180239. Last reviewed by CA Harun Raaj: September 2026.
The Employees' State Insurance Corporation launched the Amnesty Scheme 2025 on 1 October 2025 under the initiative "LESS LITIGATION – MORE COMPLIANCE." Approved at the 196th ESIC Corporation meeting in Shimla and notified via PIB Press Release (PRID: 2180239), the scheme gives employers a one-time window to settle outstanding ESI contributions, interest, damages, and pending litigation under the ESI Act, 1948. Circular reference: No. P-11/14/Amnesty Scheme/2023-Rev.II.
The scheme closes on 30 September 2026. If your establishment has outstanding ESIC dues, a Section 85B damages notice, or a pending case under Section 75 or Section 82 of the ESI Act, this is the last date to bring in your application.
Key point: Running establishments that settle under the scheme pay only outstanding contributions plus statutory interest — Section 85B damages are waived in full.
What the scheme covers
- Outstanding ESI contributions (the principal amount owed to ESIC).
- Statutory interest under Section 85C of the ESI Act, 1948.
- Damages under Section 85B of the ESI Act, 1948, which are waived for eligible units.
- Pending court cases under Sections 75 and 82 of the ESI Act.
- Prosecution proceedings against employers and insured persons.
Who can apply — and who cannot
Eligible:
- All running ESIC-registered establishments with outstanding contributions.
- Closed units (closed within 5 years) with pending dues or litigation.
- Closed units (closed more than 5 years ago) where litigation has been pending for more than 5 years and no formal assessment order has been made.
- Employers who availed an earlier ESIC amnesty scheme remain eligible to apply under this one.
Not eligible:
- Units voluntarily registered under Form-01 of the ESI (Central) Rules, 1950.
What employers get: the damages waiver
This is the most valuable feature of the scheme. Section 85B allows ESIC to levy damages of up to 25% of outstanding contributions, on top of statutory interest under Section 85C — a liability that can dwarf the original dues. The amnesty removes this cost entirely for running units and closed units that fall within the eligibility criteria.
Illustrative example
Note: this is an illustrative example only, built to show how the settlement math works — it is not a real case.
A Pune-based MSME garment manufacturer with 80 ESI-covered employees has outstanding ESI contributions for FY 2021-22 to FY 2023-24 of ₹14,20,000, a Section 85B damages notice of ₹3,55,000, and statutory interest of approximately ₹2,10,000. Without the amnesty, the company faces a total liability of roughly ₹19,85,000 plus prosecution risk.
Under the Amnesty Scheme 2025, the company pays contributions (₹14,20,000) and interest (₹2,10,000), while the ₹3,55,000 damages demand is waived — bringing the total settlement to ₹16,30,000, a saving of ₹3,55,000 in damages alone, before counting avoided legal costs.
How to apply — step by step
- Prepare your records: gather salary/wage registers, attendance registers, ESI contribution registers, and any assessment or demand notices already received from ESIC.
- Submit the prescribed form to your Regional Director (RD) or Additional Commissioner-cum-Regional Director (ACRD) at the ESIC Regional Office covering your establishment.
- Provide supporting records so ESIC can verify and determine the accepted dues.
- Await ESIC communication: the Corporation processes settlements within 6 months of application submission, and no court attendance is required once settlement terms are agreed.
- Make payment: pay the accepted contributions plus interest as communicated by ESIC — damages are waived at this stage for eligible categories.
The application must reach ESIC before 30 September 2026. Establishments with dues, damages notices, or pending litigation under the ESI Act should review their records against the eligibility criteria above well before that date, since ESIC's processing window itself runs up to six months.
For ESIC registration and payroll compliance support, reach out to Harun Raaj & Associates.
This article is for general information only and does not constitute legal or professional advice. ESI compliance is fact-specific to each establishment's dues, closure status, and litigation history.
I'm CA Harun Raaj, Visakhapatnam. If your establishment has outstanding ESIC dues, a damages notice, or a pending case under the ESI Act, get in touch before the 30 September 2026 deadline.
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See Also
Frequently Asked Questions
What is the ESIC Amnesty Scheme 2025?
It is a one-time scheme launched by ESIC on 1 October 2025 under "LESS LITIGATION – MORE COMPLIANCE", approved at the 196th ESIC Corporation meeting and notified vide PIB Press Release PRID 2180239. It lets employers settle outstanding ESI contributions, interest, and Section 85B damages, and resolve pending litigation under Sections 75 and 82 of the ESI Act, 1948, before the scheme closes on 30 September 2026.
Can employers apply even if ESIC has filed a criminal case against them?
Yes. The scheme specifically covers prosecution proceedings against employers and insured persons under the ESI Act. Settling the accepted dues and interest under the amnesty results in withdrawal of the prosecution.
Do employers have to pay Section 85B damages before contributions are settled?
No. Running establishments under the scheme pay only the outstanding contributions plus statutory interest under Section 85C. The Section 85B damages demand is waived in full for eligible running units.
Can a factory that closed in 2022 apply for the ESIC Amnesty Scheme 2025?
Yes. Units closed within 5 years are eligible and can settle by paying accepted dues plus statutory interest, with damages waived, the same as running establishments.
What if a unit closed before 2021 and litigation has been pending for over 5 years?
If the unit closed more than 5 years ago, litigation has been pending for more than 5 years, and no formal assessment order has been issued, the case is eligible for withdrawal under the scheme without any payment.
Are voluntarily registered units under Form-01 eligible for the amnesty?
No. The scheme excludes units voluntarily registered under Form-01 of the ESI (Central) Rules, 1950 from eligibility.
What is the last date to apply under the ESIC Amnesty Scheme 2025?
Applications must be submitted to the Regional Director or ACRD covering the establishment before 30 September 2026, the scheme's closing date as notified in PIB Press Release PRID 2180239.
Can employers who used an earlier ESIC amnesty scheme apply again in 2025?
Yes. Employers who availed an earlier ESIC amnesty scheme remain eligible to apply under the Amnesty Scheme 2025, subject to meeting the current eligibility conditions.
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