Tax treatment of the accumulated balance of recognised provident funds (RPFs) : Clause 191 of the Income Tax Bill, 2025 Vs. Section 111 of the Income-tax Act, 1961

Tax on provident fund accumulations: retrospective, year wise recalculation imposed when exemption conditions fail and tax withheld at payment.

Clause 191 charges tax on an accumulated balance of a recognised provident fund when schedule exemption conditions are unmet, directing the Assessing Officer to perform a retrospective, year wise calculation of the notional tax that would have applied had the fund not been recognised and to charge the excess over tax actually paid in the year of payment, with trustees required to withhold tax at source on the taxable portion.