Sections 20 to 23 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The last four sections of Chapter III of the Code on Social Security, 2020 deal with who stays outside the EPF Chapter (s.20), how a large employer can be authorised to run its own provident fund account (s.21), what happens to a member's money when he changes jobs (s.22) and where an employer appeals against an assessment or damages (s.23).
Chapter III does not apply to small co-operatives working without power (fewer than fifty persons), to certain Government or statutory establishments with their own provident fund or pension arrangements, or to employees already receiving PF benefits under another enactment before commencement; the Central Government can also exempt a class by notification (s.20). An establishment with one hundred or more persons can be authorised to maintain its own PF account, unless it defaulted or committed an offence in the preceding three years (s.21). Accumulations follow the member when he changes jobs (s.22). An appeal to the Tribunal against assessment of dues or damages needs a 25 per cent. deposit for the dues appeal and the Tribunal should decide within one year (s.23).
Section 20: where Chapter III does not apply
Automatic exclusions: s.20(1)
| Clause | Excluded |
|---|---|
| (a) | An establishment registered under the Co-operative Societies Act, 1912 or a State co-operative societies law, employing less than fifty persons and working without the aid of power |
| (b) | Any other establishment belonging to or under the control of the Central Government or a State Government whose employees are entitled to the benefit of contributory provident fund or old age pension under a scheme or rule framed by that Government |
| (c) | Any other establishment set up under a Central, State or other law whose employees are entitled to contributory provident fund or old age pension under a scheme or rule framed under that law |
| (d) | Employees who, immediately before the commencement of the Code, were receiving benefits of Provident Fund under any Central or State enactment |
Exemption by notification: s.20(2)
If the Central Government thinks it necessary or expedient having regard to the financial position of a class of establishment or other circumstances, it may, by notification and on stated conditions, exempt that class from the operation of the Chapter, prospectively or retrospectively, for a specified period.
Coverage questions are common for cooperatives and group entities. If you need to confirm whether an entity is inside Chapter III, see the thresholds in sections 1 and 164 and ask our ESI and PF registration team to check the facts. Section 164(2)(c) also continues exemptions granted under the repealed EPF Act until they expire or cease under the Code.
Rule 3 of the Central Rules, 2026 covers the separate route of making Chapter III or IV inapplicable to an establishment that opted in under s.1(5) or (7): the application goes electronically on the specified portal, both employer and the majority of employees must agree in writing, the authority must decide within sixty days (failing which permission is deemed granted), no application can be made before five years of coverage, and the employer must have filed all returns, paid all dues and given a self-certification. See rules 3 and 4.
Section 21: authorising an employer to keep its own PF account
| Sub-section | Provision |
|---|---|
| 21(1) | The Central Government may, on an application by the employer and the majority of employees of an establishment employing one hundred or more persons, authorise the employer by written order to maintain a provident fund account for the establishment, in the prescribed manner and on the terms in the Provident Fund Scheme |
| Proviso | No authorisation if the employer committed any default in PF contribution or any other offence under the Code during the three years immediately before the authorisation |
| 21(2) | The authorised employer must maintain the account, submit returns, deposit contributions, provide inspection facilities, pay administrative charges and abide by the scheme's other terms |
| 21(3) | The authorisation may be cancelled by written order if the employer fails to comply with its terms or commits an offence under the Code; before cancelling, a reasonable opportunity of being heard must be given |
This is an authorisation route for employers who want to manage their own account. It should not be confused with exemption of a class under s.20(2). Contribution rates and the pension share are in sections 15 and 16; our existing post on private trust exemption under the old Act is useful background, but the Code's conditions above are the current text.
Section 22: transfer of accounts
Where an employee:
- (a) employed in an establishment to which Chapter III applies relinquishes his employment and obtains employment in any other establishment, whether or not Chapter III applies to it; or
- (b) employed in an establishment to which Chapter III does not apply relinquishes it and obtains employment in an establishment to which it does apply,
his accumulated amount in the provident fund account or pension account shall be transferred or dealt with in the manner specified in the Provident Fund Scheme or the Pension Scheme. The Code leaves the mechanics to the schemes. Our posts on how to transfer EPF online and Form 13 describe the existing practice; check the scheme in force.
Section 23: appeal to the Tribunal
| Sub-section | Provision |
|---|---|
| 23(1) | A person aggrieved by an order on (a) determination and assessment of dues under s.125 relating to Chapter III, or (b) levy of damages under s.128 relating to Chapter III may appeal to the Tribunal constituted by the Central Government |
| 23(2) | The appeal is filed in the form and manner, within the time and with the fee prescribed by the Central Government |
| 23(3) | No appeal by the employer under clause (a) is entertained unless he has deposited 25 per cent. of the amount due as determined under s.125 with the Social Security Organisation concerned |
| 23(4) | The Tribunal shall endeavour to decide within one year from the date the appeal is preferred |
Rule 13 of the Central Rules, 2026
The rules fill in the prescribed details, for Central-sphere matters:
| Point | Rule 13 |
|---|---|
| Language | English; parties may file documents in Hindi; the Tribunal may permit Hindi proceedings but the final order is in English |
| Form | Appeal in Form-I, presented by the appellant, an agent or a legal practitioner, electronically or in paper-book form; acknowledgement in Form-II |
| Forum | Ordinarily the Registrar of the Tribunal where the cause of action arose or where the respondent's office is located |
| Fee | Rupees two thousand, by electronic transfer or crossed demand draft |
| Limitation | Sixty days from the date of issue of an order under s.125 or s.128; the Tribunal may extend by a further sixty days if prevented by sufficient cause |
| Deposit | No employer appeal is entertained without a deposit into the Fund under s.16 of twenty-five per cent. of the amount due as determined under s.125 |
| Defects | Registrar may allow formal defects to be rectified; otherwise the appellant gets fifteen days to cure, failing which registration may be declined |
| Content | Concise numbered grounds; a paper-book with the order, documents relied upon and an index; a single cause of action with consequential reliefs |
Read more in rule 13 and Forms I and II. Where the State Government is the appropriate Government, check the State's own rules.
Example. An employer is assessed for 40 lakh rupees of PF dues under s.125. To appeal, it must first deposit 25 per cent., meaning 10 lakh rupees, into the Fund, file Form-I with the fee of rupees two thousand and do so within sixty days of the order's issue, or show sufficient cause to use the extra sixty days. The Tribunal should try to decide within a year.
If you receive an assessment order, our legal dispute resolution team can help evaluate the appeal and prepare the filing.
Need help with an assessment, exemption or appeal?
Deadlines are short (sixty days) and the deposit is a pre-condition, so early advice matters. Our ESI and PF registration team can help you check coverage, exemption status and your PF account set-up, and our legal dispute resolution team can assist with the appeal itself. Bring the order and your payment records.
Key takeaways
- Chapter III excludes small co-operatives, specified Government or statutory establishments and prior PF recipients; the Central Government can exempt a class.
- An employer of one hundred or more may be authorised to keep its own PF account, unless it defaulted or offended in the last three years.
- Accumulations transfer with the employee under the schemes.
- Appeals against s.125 assessments and s.128 damages go to the Tribunal; the dues appeal needs a 25 per cent. deposit.
- Central Rules: Form-I, fee of rupees two thousand, sixty days plus sixty.
Read next
- Sections 17, 18 and 19: contractor recovery, tax status and priority of PF dues
- Sections 125 and 126: assessment and appeal
- Rule 13: filing of appeals before the Tribunal
- EPF Tribunal: EPFAT appeal process
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.