TaxTMI 
TaxTMI 
RECOGNISED PROVIDENT FUNDS
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.... an employee, excluding any sum credited as interest; (e) "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; (f) "annual accretion", in relation to the balance to the credit of an employee means the yearly increase to such balance, from contributions and interest; (g) "accumulated balance due to an employee" means the balance to his credit, or portion thereof claimable by the employee under the regulations of the fund, on the day he ceases to be an employee of the employer maintaining the fund; (h) "regulations of a fund" means the specific regulations governing the constitution and administration of a particular provident fund; and (i) "salary" includes dearness allowance, if provided for in the terms of employment, but excludes all other allowances and perquisites. 3. Recognition to provident fund and its withdrawal.-(1) The approving authority may grant recognition to a provident fund, which in his opinion, satisfies the conditions prescribed in paragraph 4 and the rules made by the Board in this regard and may, at any time, withdraw such recognition if, in his opinion, the prov....
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.... shall be the fund of an establishment- (i) to which the provisions of section 1(3) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) apply; or (ii) notified by the Central Provident Fund Commissioner under section 1(4) of the said Act, and such establishment shall be exempted from the operation of all or any of the provisions of any scheme mentioned in section 17 of the said Act; (g) the employer, subject to clause (h), shall not be entitled to recover any sum from the fund, except when the employee- (i) is dismissed for misconduct; or (ii) voluntarily leaves his employment otherwise than due to ill-health or other unavoidable cause before the end of the term of service specified in the regulations of the fund; (h) for the purposes of clause (g), the recovery made by the employer shall be limited to-- (i) the contributions made by him to the individual account of the employee; (ii) interest credited in respect of such contributions as per the regulations of the fund; and (iii) the accumulations thereof; (i) the accumulated balance due to an employe....
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....ibutions of a contingent nature, when the calculation and payment of such bonuses or contributions is provided for on definite principles by the regulations of the fund. (5) Irrespective of anything contained in paragraph 4(j), in order to allow an employee to pay the amount of tax assessed on his total income under paragraph 11(4), such employee shall be allowed to withdraw from the balance amount to his credit in the recognised provident fund, a sum not exceeding the difference between such amount and the amount to which he would have been assessed if the transferred balance referred to in paragraph 11(2) had not been included in the total income. 6. Employer's annual contributions, when deemed to be income received by employee.-The portion of the annual accretion in the tax year to the employee's balance in a recognised provident fund consisting of- (a) contributions made by the employer exceeding 12% of the employee's salary; and (b) interest credited on the balance to the credit of an employee in so far as it is allowed at a rate exceeding such rate as fixed by the Central Government by notification, shall be deemed to have been received by the emplo....
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....y of tax for such years shall be payable by the employee in addition to any other tax for which he may be liable for the tax year in which the accumulated balance due to him becomes payable. 10. Deduction at source of tax payable on accumulated balance.-In cases where paragraph 9 applies-- (a) the trustees of a recognised provident fund; or (b) any person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall deduct from the accumulated balance at the time of payment, the amount payable under the rule and the provisions of Chapter XIX-B shall apply as if the accumulated balance were income chargeable under the head "Salaries". 11. Treatment of balance in newly recognised provident fund.-(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,- (a) showing the balance to the credit of each employee on such day; and (b) containing such further particulars as prescribed. (2) The account shall also show in respect of balance to the credit of each emp....
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....r objecting to an order of the approving authority not granting recognition or withdrawing recognition from a provident fund may appeal to the Board, within sixty days of such order (2) The appeal shall be in such form and verified in such manner, and subject to the payment of such fee as prescribed. 14. Treatment of fund transferred by employer to trustee.-(1) When an employer who maintains a provident fund, whether recognised or not, for the benefit of his employees and has not transferred the fund or portion of it, transfers such fund or portion to trustees in trust for the participating employees, the transferred amount shall be deemed to be of the nature of capital expenditure. (2) When an employee receives the accumulated balance due to him from the fund, any portion of such balance representing the employee's share of the amount transferred to the trustees (without addition of interest and exclusive of employee's contributions and interest thereon) shall be deemed to be,- (a) employer's expenditure under 34; (b) incurred in the tax year in which the accumulated balance due to the employee is paid, provided an arrangement for deduction of tax at ....
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.... (d) all annuities, pensions and other benefits, granted from the fund shall be payable only in India. 4. Application for approval.-(1) An application for approval of a superannuation fund or part of it, or any gratuity fund, as the case may be, shall be made in writing by the trustees to the Assessing Officer by whom the employer is assessable, and shall be accompanied by- (a) a copy of the instrument establishing the fund and two copies of the rules thereof; and (b) two copies of the accounts of the fund relating to such earlier year or years (not more than three years immediately preceding the year in which the said application is made) for which the accounts have been made up, if the fund has been in existence before the financial year in which the application for approval is made. (2) In addition to the documents referred to in sub-paragraph (1), the approving authority may require such further information to be furnished as he thinks proper. (3) If any alteration is made to the rules, constitution, objects or conditions of the fund after the date of the application for approval,-- (a) the trustees shall immediately inform such alterations ....
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....tax on any sum paid on account of returned contributions (including interest on contributions, if any), in so far as the sum so paid is in respect of contributions made before the fund or part of the fund ceased to be an approved superannuation fund under the provisions of this Part. 11. Liabilities of trustees.-If a gratuity fund for any reason ceases to be an approved gratuity fund, the trustees shall nevertheless remain liable to tax on any gratuity paid to any employee. 12. Particulars to be furnished in respect of superannuation funds.-The trustees of an approved superannuation fund or an approved gratuity fund and any employer who contributes to such a fund shall furnish such returns, statement, particulars or information, as required by notice from the Assessing Officer within the specified period, not being less than twenty-one days from the date of the notice. PART C POWER TO MAKE RULES FOR PROVIDENT FUNDS, SUPERANNUATION FUNDS AND GRATUITY FUNDS 1. Power of Board to make rules for fund.-In addition to powers granted by Part A and Part B of this Schedule, the Board may make rules for a fund (provident fund or superannuation fund or gratuity fund) in respect ....