Section 21: Authorising certain employers to maintain provident fund accounts
Reviewed by Finin2min Editorial Desk · Last reviewed 30 August 2026
Section 21 — Governs authorising certain employers to maintain provident fund accounts and the rights, duties, powers or procedure expressly stated in this section. Key operative text: (1) The Central Government may, on an application made to it in this behalf by the employer and the majority of employees in relation to an establishment employing one hundred or more persons, authorise the employer by an…
The Code was commenced in stages: section 142 had earlier commencement, S.O. 5319(E) brought the specified provisions into force from 21 November 2025, and later commencement instruments must be read with the current India Code footnotes for the remaining clauses.
Provision / India Code ↗ · Official Act PDF ↗ · 2026 Central Rules ↗
Finin2min analysis — what the section actually does
Operative clauses
- (1) The Central Government may, on an application made to it in this behalf by the employer and the majority of employees in relation to an establishment employing one hundred or more persons, authorise the employer by an order in writing, to maintain a provident fund account in relation to the establishment, in such manner as may be prescribed by the Central Government and subject to such terms and conditions as…
- Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.
- (2) Where an establishment is authorised to maintain a provident fund account under sub-section (1), the employer in relation to such establishment shall maintain such account, submit such return, deposit the contribution in such manner, provide for such facilities for inspection, pay such administrative charges, and abide by such other terms and conditions, as may be specified in the Provident Fund Scheme.
- (3) Any authorisation made under this section may be cancelled by the Central Government by order in writing if the employer fails to comply with any of the terms and conditions of the authorisation or where he commits any offence under any provision of this Code:
- Provided that before cancelling the authorisation, the Central Government shall give the employer a reasonable opportunity of being heard.
Provisos, explanations & qualifications
- Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.
- Provided that before cancelling the authorisation, the Central Government shall give the employer a reasonable opportunity of being heard.
Thresholds and timelines in the text
- Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.
Actors expressly appearing in the text
Employer, Employee / worker, Central Government
Full statutory text — Section 21
21. Authorising certain employer to maintain provident fund accounts.— (1) The Central
Government may, on an application made to it in this behalf by the employer and the majority of employees
in relation to an establishment employing one hundred or more persons, authorise the employer by an order
in writing, to maintain a provident fund account in relation to the establishment, in such manner as may be
prescribed by the Central Government and subject to such terms and conditions as may be specified in the
Provident Fund Scheme:
Provided that no authorisation shall be made under this sub-section if the employer of such
establishment had committed any default in the payment of provident fund contribution or had committed
any other offence under this Code during the three years immediately preceding the date of such
authorisation.
(2) Where an establishment is authorised to maintain a provident fund account under sub-section (1),
the employer in relation to such establishment shall maintain such account, submit such return, deposit the
contribution in such manner, provide for such facilities for inspection, pay such administrative charges, and
abide by such other terms and conditions, as may be specified in the Provident Fund Scheme.
(3) Any authorisation made under this section may be cancelled by the Central Government by order
in writing if the employer fails to comply with any of the terms and conditions of the authorisation or where
he commits any offence under any provision of this Code:
Provided that before cancelling the authorisation, the Central Government shall give the employer a
reasonable opportunity of being heard.How to apply this provision
- Primary statutory test — (1) The Central Government may, on an application made to it in this behalf by the employer and the majority of employees in relation to an establishment employing one hundred or more persons, authorise the employer by an order in writing, to maintain a provident fund account in relation to the establishment, in such manner as may be prescribed by the Central Government and subject to such terms and conditions as…
- Additional operative limb — Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.
- Qualification / exception to test — Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.
- Numerical or timing control — Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.
- Evidence file — retain facts and records proving the role/status of: Employer, Employee / worker, Central Government.
Rules, forms and cross-references
Direct 2026 Central Rule mapping
Forms mapped
No prescribed form is directly mapped in the current concordance.
Other sections cited in this text
Related Labour Hub resources
A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.
Worked example
For a worker/member seeking a benefit connected with authorising certain employers to maintain provident fund accounts, the file should show coverage, service/contribution facts, the rule/scheme and prescribed form, and the calculation/payment. One statutory point to test is: “Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the da” Also test the express qualification/proviso before concluding the result.
Illustration only; it is not statutory text or a substitute for applying the actual facts, jurisdiction, current rule/scheme and official instrument.
Q&A — Section 21
What does Section 21 of the Social Security Code cover?
Section 21 — Governs authorising certain employers to maintain provident fund accounts and the rights, duties, powers or procedure expressly stated in this section. Key operative text: (1) The Central Government may, on an application made to it in this behalf by the employer and the majority of employees in relation to an establishment employing one hundred or more persons, authorise the employer by an…
What is the main legal requirement or power in Section 21?
The first operative clause identified from the official text is: “(1) The Central Government may, on an application made to it in this behalf by the employer and the majority of employees in relation to an establishment employing one hundred or more persons, authorise the employer by an order in writing, to maintain a provident fund account in relation to the establishment, in such manner as may be prescribed by the Central Government and subject to such terms and conditions as…” Read it with the remaining subsections and any proviso below.
Does Section 21 contain a proviso or explanation?
Yes. A qualification extracted from the official text is: “Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.”
What time limit, percentage or amount appears in Section 21?
The provision contains this numerical/time expression: “Provided that no authorisation shall be made under this sub-section if the employer of such establishment had committed any default in the payment of provident fund contribution or had committed any other offence under this Code during the three years immediately preceding the date of such authorisation.” Apply it only in the clause and context in which it appears.
Which 2026 Central Rules are linked to Section 21?
No direct Central Rule is recorded in the current concordance. That does not exclude a relevant scheme, notification, State rule or enabling provision.
Is Section 21 currently operative?
The Code was commenced in stages: section 142 had earlier commencement, S.O. 5319(E) brought the specified provisions into force from 21 November 2025, and later commencement instruments must be read with the current India Code footnotes for the remaining clauses.
Source & verification trail
Act: Code on Social Security, 2020 — official India Code PDF ↗
Central Rules: Social Security (Central) Rules, 2026 — G.S.R. 344(E), 8 May 2026 ↗
Official library: Ministry of Labour & Employment — Labour Codes ↗
Source check: 20 August 2026. Individual professional interpretation should be re-reviewed when the section, rules, notification, scheme, State overlay or controlling judgment changes.