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Recognised Provident Funds
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....edited as interest; (d) "balance to the credit of an employee" means the total amount to the credit of his individual account in a provident fund at any time; (e) "annual accretion" in relation to the balance to the credit of an employee, means the increase to such balance in any year, arising from contributions and interest; (f) "accumulated balance due to an employee" means the balance to his credit, or such portion thereof as may be claimable by him under the regulations of the fund, on the day he ceases to be an employee of the employer maintaining the fund; (g) "regulations of a fund" means the special body of regulations governing the constitution and administration of a particular provident fund; and (h) "salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites. According and withdrawal of recognition 3. (1) The ^28[^93[Principal Chief Commissioner or Chief Commissioner] or ^72[Principal Commissioner or Commissioner]] may accord recognition to any provident fund which, in his opinion, satisfies the conditions prescribed in rule 4 and the rules made by the B....
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....ployer whose principal place of business is in India; (b) the contributions of an employee in any year shall be a definite proportion of his salary for that year, and shall be deducted by the employer from the employee's salary in that proportion, at each periodical payment of such salary in that year, and credited to the employee's individual account in the fund; (c) the contributions of an employer to the individual account of an employee in any year shall not exceed the amount of the contributions of the employee in that year, and shall be credited to the employee's individual account at intervals not exceeding one year; (d) the fund shall be vested in two or more trustees or in the Official Trustee under a trust which shall not be revocable, save with the consent of all the beneficiaries; (e) the fund shall consist of contributions as above specified, received by the trustees, of accumulations thereof, and of interest credited in respect of such contributions and accumulations, and of securities purchased therewith and of any capital gains arising from the transfer of capital assets of the fund, and of no other sums; ^66[....
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....during his service in the armed forces of the Union or while so taken into or employed in the national service a sum not exceeding the amount he would have contributed had he continued to serve the employer. (3) Notwithstanding anything contained in clause (e) or clause (g) of rule 4,- (a) at the request made in writing by the employee who ceases to be an employee of the employer maintaining the fund, the trustees of the fund may consent to retain the whole or any part of the accumulated balance due to the employee to be drawn by him at any time on demand; (b) where the accumulated balance due to an employee who has ceased to be an employee is retained in the fund in accordance with the preceding clause, the fund may consist also of interest in respect of such accumulated balance. ^22[(c) the fund may also consist of any amount transferred from the individual account of an employee in any recognised provident fund maintained by his former employer and the interest in respect thereof.] (4) Subject to any rules which the Board may make in this behalf, the ^32[^97[Principal Chief Commissioner or Chief Commissioner] or ^76[Principal Commissioner or Comm....
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....in a recognised provident fund shall be excluded from the computation of his total income- (i) if he has rendered continuous service with his employer for a period of five years or more, or (ii) if, though he has not rendered such continuous service, the service has been terminated by reason of the employee's ill-health, or by the contraction or discontinuance of the employer's business or other cause beyond the control of the employee, ^23[or] ^24[(iii) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by ^114[such other employer; or]. ^115[(iv) if the entire balance standing to the credit of the employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government.] Explanation : Where the accumulated balance due and becoming payable to an employee participating in a recognised provident fund maintained by his employer includes any amount transferred from his indivi....
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....d provident fund 11. (1) Where recognition is accorded to a provident fund with existing balances, an account shall be made of the fund up to the day immediately preceding the day on which the recognition takes effect, showing the balance to the credit of each employee on such day, and containing such further particulars as the Board may prescribe. (2) The account shall also show in respect of the balance to the credit of each employee the amount thereof which is to be transferred to that employee's account in the recognised provident fund, and such amount (hereinafter called his transferred balance) shall be shown as the balance to his credit in the recognised provident fund on the date on which the recognition of the fund takes effect, and sub-rule (4) of this rule and sub-rule (5) of rule 5 shall apply thereto. (3) Any portion of the balance to the credit of an employee in the existing fund which is not transferred to the recognised fund shall be excluded from the accounts of the recognised fund and shall be liable to income-tax ^5[****] in accordance with the provisions of this Act, other than this Part. (4) Subject to such rules as the Board may make in this be....
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....s and has not transferred the fund or any portion of it, transfers such fund or portion to trustees in trust for the employees participating in the fund, the amount so transferred shall be deemed to be of the nature of capital expenditure. (2) When an employee participating in such fund is paid the accumulated balance due to him therefrom, any portion of such balance as represents his share in the amount so transferred to the trustees (without addition of interest, and exclusive of the employee's contributions and interest thereon) shall, if the employer has made effective arrangements to secure that tax shall be deducted at source from the amount of such share when paid to the employee, be deemed to be an expenditure by the employer within the meaning of section 37, incurred in the previous year in which the accumulated balance due to the employee is paid. Provisions relating to rules 15. (1) In addition to any power conferred by this Part, the Board may make rules- (a) prescribing the statements and other information to be submitted along with an application for recognition; (b) limiting the contributions to a recognised provident fund by employees ....
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....r or Chief Commissioner] or ^81[Principal Commissioner or Commissioner]] shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect. (4) The ^38[^103[Principal Chief Commissioner or Chief Commissioner] or ^82[Principal Commissioner or Commissioner]] shall neither refuse nor withdraw approval to any superannuation fund or any part of a superannuation fund unless he has given the trustees of that fund a reasonable opportunity of being heard in the matter. Conditions for approval 3. In order that a superannuation fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the Board may, by rules, prescribe- (a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in India, and not less than ninety per cent of the employees shall be employed in India; (b) the fund shall have for its sole purpose the provision of annuities for employees in the trade or undertaking on their retirement at or after a specified age or on their becom....
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....[in circumstances other than those referred to in clause (13) of section 10] ^8[tax] on the amounts so paid shall be deducted at the average rate of ^9[tax] at which the employee was liable to ^10[tax] during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government within the prescribed time and in such manner as the Board may direct. Deduction from pay of and contributions on behalf of employee to be included in return 7. Where an employer deducts from the emoluments paid to an employee or pays on his behalf any contributions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under ^27[****] section 206. Appeals 8. (1) An employer objecting to an order of the ^41[^106[Principal Chief Commissioner or Chief Commissioner] or ^85[Principal Commissioner or Commissioner]] refusing to accord approval to a superannuation fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board. (2) The appeal shall be in suc....
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....n withdrawn; (f) providing for the withdrawal of approval in the case of a fund which ceases to satisfy the requirements of this Part or of the rules made thereunder; and (g) generally, to carry out the purposes of this Part and to secure such further control over the approval of superannuation funds and the administration of approved superannuation funds as it may deem requisite. (2) All rules made under this part shall be subject to the provisions of section 296. PART C Approved gratuity funds ^21[[see sections 2(5), 10(25)(iv), 17(1)(iii), 36(1)(v)]] Definitions 1. In this Part, unless the context otherwise requires, "employer", "employee", "contribution" and "salary" have, in relation to gratuity funds, the meanings assigned to those expressions in rule 2 of Part A in relation to provident funds. Approval and withdrawal of approval 2. (1) The ^42[^107[Principal Chief Commissioner or Chief Commissioner] or ^86[Principal Commissioner or Commissioner]] may accord approval to any gratuity fund which, in his opinion, complies with the requirements of rule 3 and may at any time withdraw such approval if, in his opinion, the circumstances of t....
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....year in which the application for approval is made, also two copies of the accounts of the fund relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up], but the ^46[^111[Principal Chief Commissioner or Chief Commissioner] or ^90[Principal Commissioner or Commissioner]] may require such further information to be supplied as he thinks proper. (2) If any alteration in the rules, constitution, objects or conditions of the fund is made at any time after the date of the application for approval, the trustees of the fund shall forthwith communicate such alterations to the ^58[Assessing Officer] mentioned in sub-rule (1), and in default of such communication, any approval given shall, unless the ^47[^112[Principal Chief Commissioner or Chief Commissioner] or ^91[Principal Commissioner or Commissioner]] otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect. Gratuity deemed to be salary 5. Where any gratuity is paid to an employee during his lifetime, the gratuity shall be treated as salary paid to the employee ....
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....fund; (d) providing for the withdrawal of the approval in the case of a fund which ceases to satisfy the requirements of this Part or the rules made thereunder; and (e) generally, to carry out the purposes of this Part and to secure such further control over the approval of gratuity funds and the administration of gratuity funds as it may deem requisite. (2) All rules made under this Part shall be subject to the provisions of section 296. ************** NOTES:- 1. Omitted vide Section 66 of the Finance Act, 1965 w.e.f. 01-04-1965 before it was read as, "and super-tax" 2. Substituted vide Section 66 of the Finance Act, 1965 w.e.f. 01-04-1965 before it was read as, "Exemption for employee's contributions 7. An employee participating in a recognised provident fund shall be entitled to a deduction from the amount of income-tax on his total income with which he is chargeable for any assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on his own contributions to his individual account in the fund in the previous year, in so far as the....
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....axation Laws (Amendment) Act, 1970 w.e.f. 01-04-1971 18. Substituted vide Section 57 of the Taxation Laws (Amendment) Act, 1970 w.e.f. 01-04-1971 before it was read as, "and of the accounts of the fund for the last three years for which such accounts have been made up" 19. Inserted vide Section 57 of the Taxation Laws (Amendment) Act, 1970 w.e.f. 01-04-1971 20. Inserted vide Section 57 of the Taxation Laws (Amendment) Act, 1970 w.e.f. 01-04-1971 21. Substituted vide Section 42 of the Finance Act, 1972 w.e.f. 01-04-1973 before it was read as, "[See sections 2(5), 17(1)(iii), 36(1)(v)]" 22. Inserted vide Section 12 of the Finance Act, 1974 w.e.f. 01-04-1974 23. Inserted vide Section 12 of the Finance Act, 1974 w.e.f. 01-04-1975 24. Inserted vide Section 12 of the Finance Act, 1974 w.e.f. 01-04-1975 25. Omitted vide Section 34 of the Finance (No. 2) Act, 1980 w.e.f. 01-04-1981 before it was read as, "exceeds one-third of the salary of the employee or" 26. Substitut....
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.... w.e.f. 01-04-1988 before it was read as, "Commissioner" 42. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 43. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 44. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 45. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 46. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 47. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 48. Substituted vide Section 2 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1988 before it was read as, "Commissioner" 49. Substit....
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.... 2007" 65. Inserted vide Section 82 of the Finance Act, 2007 w.e.f. 01-04-2007 66. Substituted vide Section 82 of the Finance Act, 2007 w.e.f. 01-04-2007 before it was read as, "^63[(ea) the fund of an establishment to which the provisions of sub-section (3) or sub-section (4) of section 1 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952(19 of 1952) apply, and such establishment has been exempted under section 17 of the said Act from the operation of all or any of the provisions of any Scheme referred to in that section;]" 67. Substituted vide Section 59 of the Finance Act, 2008 w.e.f. 01-04-2008 before it was read as, "^64[31st day of March, 2008]" 68. Substituted vide Section 81 of the Finance (No.2) Act, 2009 w.e.f. 01-04-2009 before it was read as, "^67[31st day of March, 2009]" 69. Substituted vide Section 34 of the Finance Act, 2011 w.e.f. 01-01-2011 before it was read as, "^68[31st day of December, 2010]" 70. Substituted vide Section 114 of the Finance Act, 2012 w.e.f. 01-04-2012 b....
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.... 87. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Commissioner" 88. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Commissioner" 89. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Commissioner" 90. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Commissioner" 91. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Commissioner" 92. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Commissioner" 93. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Chief Commissioner" 94. Substituted vide Section 4 of the Finance (No. 2) Act, 2014 w.e.f. 01-06-2013 before it was read as, "Chief Commissioner" 95. Subs....