Provident fund tax exemption on withdrawal of recognition shifts employee balances to taxable treatment thereafter. Exemption from tax applies when recognition of a provident fund is withdrawn. The employee's balance at the end of the financial year before withdrawal is paid free of tax, subject to paragraph 9 of Part A of Schedule XI to the Act, when the accumulated balance becomes payable. The remaining accumulated balance is taxable as if the fund had never been recognised, reflecting the tax consequence of withdrawal of recognition.
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Provisions expressly mentioned in the judgment/order text.
Provident fund tax exemption on withdrawal of recognition shifts employee balances to taxable treatment thereafter.
Exemption from tax applies when recognition of a provident fund is withdrawn. The employee's balance at the end of the financial year before withdrawal is paid free of tax, subject to paragraph 9 of Part A of Schedule XI to the Act, when the accumulated balance becomes payable. The remaining accumulated balance is taxable as if the fund had never been recognised, reflecting the tax consequence of withdrawal of recognition.
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