The Fourth Schedule
Recognised
Provident Funds74[R2]
[See sections 2(38), 10(12), 10(25), 36(1)(iv), 75[R3]
87(1)(d), 111, 192(4)]
Application of Part.
1. This
Part shall not apply to any provident fund to which the Provident Funds Act,
1925 (19 of 1925), applies.
Definitions.
2. In this Part, unless the
context otherwise requires,—
(a) “employer” means
any person who maintains a provident fund for the benefit of his or its
employees, being—
(i) a Hindu undivided family, company, firm or other association
of persons, or
(ii) an individual
engaged in a business or profession the profits and gains whereof are
assessable to income-tax under the head “Profits and gains of business or
profession”;
(b) “employee” means an employee participating in a provident
fund, but does not include a personal or domestic servant;
(c) “contribution” means any sum credited by
or on behalf of any employee out of his salary, or by an employer out of his
own moneys, to the individual account of an employee, but does not include any
sum credited 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 76[R4] [Chief 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 Board in this behalf, and may,
at any time, withdraw such recognition if, in his opinion, the provident fund
contravenes any of those conditions.
(2) An order according recognition shall take effect on such date
as the 76[R5] [Chief Commissioner or Commissioner] may fix
in accordance with any rules the Board may make in this behalf, such date not
being later than the last day of the financial year in which the order is made.
(3) An order withdrawing recognition shall take effect from the
date on which it is made.
(4) An order according recognition to a provident fund shall not,
unless the 76[R6] [Chief Commissioner or Commissioner] otherwise
directs, be affected by the fact that the fund is subsequently amalgamated with
another provident fund on the occurrence of an amalgamation of the undertakings
in connection with which the two funds are maintained, or that it subsequently
absorbs the whole or a part of another provident fund belonging to an
undertaking which is wholly or in part transferred to or merged in the undertaking
of the employer maintaining the first-mentioned fund.
Conditions
to be satisfied by recognised provident funds.
4. In order
that a provident fund may receive and retain recognition, it shall, subject to
the provisions of rule 5, satisfy the conditions set out below and any other
conditions which the Board may, by rules, specify—
(a) all employees
shall be employed in India, or shall be employed by an employer 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;
(f) the employer shall not be entitled to
recover any sum whatsoever from the fund, save in cases where the employee is
dismissed for misconduct or voluntarily leaves his employment otherwise than on
account of ill-health or other unavoidable cause before the expiration of the
term of service specified in this behalf in the regulations of the fund :
Provided that in such cases the recoveries made by the
employer shall be limited to the contributions made by him to the individual
account of the employee, and to interest credited in respect of such
contributions in accordance with the regulations of the fund and the
accumulations thereof;
(g) the accumulated
balance due to an employee shall be payable on the day he ceases to be an
employee of the employer maintaining the fund;
(h) save as provided in clause (g) or
in accordance with such conditions and restrictions as the Board may, by rules,
specify, no portion of the balance to the credit of an employee shall be
payable to him.
Relaxation of conditions.
5.
(1) Notwithstanding
anything contained in clause (a) of rule 4, the 77[R7] [Chief Commissioner or Commissioner] may, if
he thinks fit and subject to such conditions, if any, as he thinks proper to
attach to the recognition, accord recognition to a fund maintained by an
employer whose principal place of business is not in India, provided the
proportion of employees employed outside India does not exceed ten per cent.
(2) Notwithstanding anything contained in clause (b) of
rule 4, an employee who retains his employment while serving in the armed
forces of the Union or when taken into or employed in the national service under
any law for the time being in force, may, whether he receives from the
employer any salary or not, contribute to the fund 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;
78[R8] [(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 rules79[R9] which the Board may make in this behalf, the 80[R10] [Chief
Commissioner or Commissioner] may, in respect of any particular fund, relax
the provisions of clause (c) of rule 4,—
(a) so as to permit the payment of larger
contributions by an employer to the individual accounts of employees whose salaries
do not in each case exceed five hundred rupees per mensem;
and
(b) so as to permit
the crediting by employers to the individual accounts of employees of
periodical bonuses or other contributions of a contingent nature, where the
calculation and payment of such bonuses or other contributions is provided for
on definite principles by the regulations of the fund.
(5) Notwithstanding anything contained in clause (h) of
rule 4, in order to enable an employee to pay the amount of tax assessed on his
total income as determined under sub-rule (4) of rule 11, he shall be entitled
to withdraw from the balance 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 sub-rule (2) of rule 11 had not been included in his total income.
Employer’s
annual contributions, when deemed to be income received by employee.
6. That
portion of the annual accretion in any previous year to the balance at the
credit of an employee participating in a recognised
provident fund as consists of—
(a) contributions
made by the employer in excess of 81[R11] [twelve]
per cent of the salary of the employee, and
(b) interest credited on the balance to the
credit of the employee in so far as it 82[R12] [***]
is allowed at a rate exceeding such rate as may be fixed by the Central
Government in this behalf by notification in the Official Gazette,shall be deemed to have been received by the
employee in that previous year and shall be included in his total income for
that previous year, and shall be liable to income-tax 83[R13] [***].
84[R14] [Exemption
for employee’s contributions.
7. An
employee participating in a recognised provident fund
shall, in respect of his own contributions to his individual account in the
fund in the previous year, be entitled to a deduction in the computation of
his total income of an amount determined in accordance with 85[R15] [section
80C].]
Exclusion from total income of accumulated balance.
8. The
accumulated balance due and becoming payable to an employee participating 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, 86[R16] [or]
87[R17] [(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 such other employer.
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 individual
account in any other recognised provident fund or
funds maintained by his former employer or employers, then, in computing the
period of continuous service for the purposes of clause (i)
or clause (ii) the period or periods for which such employee rendered
continuous service under his former employer or employers aforesaid shall be
included.]
Tax on accumulated balance.
9.
(1) Where the accumulated
balance due to an employee participating in a recognised
provident fund is included in his total income owing to the provisions of rule
8 not being applicable, the 88[R18] [Assessing]
Officer shall calculate the total of the various sums of 89[R19] [tax]
which would have been payable by the employee in respect of his total income
for each of the years concerned if the fund had not been a recognised
provident fund, and the amount by which such total exceeds the total of all
sums paid by or on behalf of such employee by way of tax for such years shall
be payable by the employee in addition to any other 89[R20] [tax]
for which he may be liable for the previous year in which the accumulated
balance due to him becomes payable.
(2) Where the accumulated balance due to an employee participating
in a recognised provident fund which is not included
in his total income under the provisions of rule 8 becomes payable, an amount
equal to the aggregate of the amounts of super-tax on annual accretions that
would have been payable under section 58E of the Indian Income-tax Act, 1922
(11 of 1922), for any assessment year up to and including the assessment year
1932-33, if the Indian Income-tax (Second Amendment) Act, 1933 (18 of 1933),
had come into force on the 15th day of March, 1930, shall be payable by the
employee in addition to any other tax payable by him for the previous year in
which such balance becomes payable.
Deduction at source of tax payable on accumulated balance.
10. The
trustees of a recognised provident fund, or any
person authorised by the regulations of the fund to
make payment of accumulated balances due to employees, shall, in cases where
sub-rule (1) of rule 9 applies, at the time an accumulated balance due to an
employee is paid, deduct therefrom the amount payable
under that rule and all the provisions of Chapter XVII-B shall apply as if the
accumulated balance were income chargeable under the head “Salaries”.
Treatment
of balance in newly recognised 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 90[R21] [***]
in accordance with the provisions of this Act, other than this Part.
(4) Subject to such rules as the Board may make in this behalf,
the 91[R22] [Assessing]
Officer shall make a calculation of the aggregate of all sums comprised in a
transferred balance which would have been liable to income-tax if this Part had
been in force from the date of the institution of the fund, without regard to
any tax which may have been paid on any sum, and such aggregate (if any) shall
be deemed to be income received by the employee in the previous year in which
the recognition of the fund takes effect and shall be included in the
employee’s total income for that previous year, and, for the purposes of
assessment, the remainder of the transferred balance shall be disregarded, but
no other exemption or relief, by way of refund or otherwise, shall be granted
in respect of any sum comprised in such transferred balance :
Provided that, in cases of serious accounting
difficulty, the 92[R23] [Chief
Commissioner or Commissioner] may, subject to the said rules, make a summary
calculation of such aggregate.
(5) Nothing in this rule shall affect the rights of the persons
administering an unrecognised provident fund or dealing
with it, or with the balance to the credit of any individual employee before
recognition is accorded, in any manner which may be lawful.
Accounts of recognised provident funds.
12.
(1) The
accounts of a recognised provident fund shall be maintained
by the trustees of the fund and shall be in such form and for such periods, and
shall contain such particulars, as the Board may prescribe.
(2) The accounts shall be open to inspection at all reasonable
times by income-tax authorities, and the trustees shall furnish to the 93[R24] [Assessing]
Officer such abstracts
thereof as the Board may prescribe.
Appeals.
13.
(1) An employer objecting
to an order of the
94[R25] [Chief
Commissioner or Commissioner] refusing to recognise
or an order withdrawing recognition from a provident fund may appeal, within
sixty days of such order, to the Board.
(2) The appeal shall be in such form and shall be verified in
such manner and shall be subject to the payment of such fee as the Board may prescribe.
Treatment of fund transferred by employer to trustee.
14.
(1) Where an employer, who
maintains a provident fund (whether recognised or
not) for the benefit of his employees 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.
95[R26] 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 of a company who are shareholders in the company;
96[R27] [(bb) regulating the investment or deposit of the
moneys of a recognised provident fund
:
Provided that no rule made under this clause shall
require the investment of more than fifty per cent of the moneys of such fund
in Government securities97[R28] as
defined in section 2 of the Public Debt Act, 1944 (18 of 1944);]
(c) providing for
the assessment by way of penalty of any consideration received by an employee
for an assignment of, or creation of a charge upon, his beneficial interest in
a recognised provident fund;
(d) determining the
extent to and the manner in which exemption from payment of 98[R29] [tax]
may be granted in respect of contributions and interest credited to the
individual accounts of employees in a provident fund from which recognition has
been withdrawn; and
(e) generally, to
carry out the purposes of this Part and to secure such further control over the
recognition of provident funds and the administration of recognised
provident funds as it may deem
requisite.
(2) All rules made under this Part shall be subject to the provisions
of section 296
Part B
Approved superannuation
funds99[R30]
[See sections 2(6), 10(13),
10(25)(iii), 36(1)(iv), 1 [R31] 87(1)(e), 192(5), 2[R32] [206]]
Definitions.
1. In
this Part, unless the context otherwise requires, “employer”, “employee”,
“contribution” and “salary” have, in relation to superannuation 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
3[R33] [Chief
Commissioner or Commissioner] may accord approval to any superannuation fund or
any part of a superannuation 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 the fund or part cease to warrant the continuance
of the approval.
(2) The 4[R34] [Chief
Commissioner or Commissioner] shall communicate in writing to the trustees of
the fund the grant of approval with the date on which the approval is to take effect,
and, where the approval is granted subject to conditions, those conditions.
(3) The 4[R35] [Chief
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 4[R36] [Chief
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—
5[R37] (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 becoming incapacitated prior
to such retirement, or for the widows, children or dependants of persons who
are or have been such employees on the death of those persons ;
(c) the employer in
the trade or undertaking shall be a contributor to the fund ; and
(d) all annuities,
pensions and other benefits granted from the fund shall be payable only in
India.
Application for approval.
4. (1) An
application for approval of a superannuation fund or part of a superannuation
fund shall be made in writing by the trustees of the fund to the 6[R38] [Assessing]
Officer by whom the employer is assessable, and shall be accompanied by a copy
of the instrument under which the fund is established and by two copies of the
rules 7[R39] [and,
where the fund has been in existence during any year or years prior to the financial
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 8[R40] [Chief
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
alteration to the 9[R41] [Assessing] Officer mentioned
in sub-rule (1), and in default of such communication any approval given shall,
unless the 8[R42]
[Chief Commissioner or Commissioner] otherwise orders, be deemed to have been
withdrawn from the date on which the alteration took effect.
Contributions by employer when deemed to be income of employer.
5. Where
any contributions by an employer (including the interest thereon, if any) are
repaid to the employer, the amount so repaid shall be deemed for the purpose of
income-tax
10[R43] [***]
to be the income of the employer of the previous year in which it is so repaid.
Deduction
of tax on contributions paid to an employee.
11[R44]
6. Where any contributions made by an
employer, including interest on contributions, if any, are paid to an employee
during his lifetime 12[R45] [in
circumstances other than those referred to in clause (13) of section
10], 13[R46] [tax] on the amounts so paid shall be deducted at
the average rate of 13[R47] [tax]
at which the employee was liable to 13[R48] [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 14[R49] [***]
section 206.
Appeals.
8. (1) An
employer objecting to an order of the 15[R50] [Chief
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 such form and shall be verified in
such manner and shall be subject to the payment of such fee as may be
prescribed.16[R51]
Liability of trustees on cessation of approval.
9. If a fund
or a part of a fund for any reason ceases to be an approved superannuation
fund, the trustees of the fund shall nevertheless remain liable to 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.
Particulars to be furnished in respect of superannuation funds.
10. The
trustees of an approved superannuation fund and any employer who contributes to
an approved superannuation fund shall, when required by notice from the 17[R52] [Assessing]
Officer, within such period, not being less than twenty-one days from the date
of the notice, as may be specified in the notice, furnish such return,
statement, particulars or information, as the 17[R53] [Assessing]
Officer may require.
Provisions relating to rules.
11. (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
approval ;
(b) prescribing the
returns, statements, particulars, or information which the 18[R54] [Assessing]
Officer may require from the trustees of an approved superannuation fund or
from the employer ;
(c) limiting the
ordinary annual contribution and any other contributions to an approved
superannuation fund by an employer ;
19[R55] [(cc) regulating the investment or deposit of the
moneys of an approved superannuation fund :
Provided that no rule made under this clause shall
require the investment of more than fifty per cent of the moneys of such fund
in 20[R56] Government
securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944) ;]
(d) providing for
the assessment by way of penalty of any consideration received by an employee
for an assignment of, or creation of a charge upon, his beneficial interest in
an approved superannuation fund ;
(e) determining the
extent to, and the manner in, which exemption from payment of 21[R57] [tax]
may be granted in respect of any payment made from a superannuation fund from
which approval has been 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 the 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
funds22[R58]
[See sections 2(5), 23[R59] [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 24[R60] [Chief
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 circum-stances of the fund cease
to warrant the continuance of the approval.
(2) The 24[R61] [Chief
Commissioner or Commissioner] shall communicate in writing to the trustees of
the fund the grant of approval with the date on which the approval is to take
effect and where the approval is granted subject to conditions, those
conditions.
(3) The 24[R62] [Chief
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 24[R63] [Chief
Commissioner or Commissioner] shall neither refuse nor withdraw approval to any
gratuity 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 gratuity 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 a gratuity to employees in the trade or undertaking on their
retirement at or after a specified age or on their becoming incapacitated prior
to such retirement or on termination of their employment after a minimum period
of service specified in the rules of the fund or to the widows, children or
dependants of such employees on their death ;
(c) the employer in
the trade or undertaking shall be a contributor to the fund ; and
(d) all benefits
granted by the fund shall be payable only in India.
Application for approval.
4. (1) An
application for approval of a gratuity fund shall be made in writing by the
trustees of the fund to the 25[R64] [Assessing]
Officer by whom the employer is assessable and shall be accompanied by a copy
of the instrument under which the fund is established and by two copies of the
rules 26[R65] [and,
where the fund has been in existence during any year or years prior to the
financial 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
27[R66] [Chief
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 28[R67] [Assessing]
Officer mentioned in sub-rule (1), and in default of such communication, any
approval given shall, unless the 27[R68] [Chief
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 for the purposes of this Act.
Liability of trustees on cessation of approval.
6. If
a gratuity fund for any reason ceases to be an approved gratuity fund, the
trustees of the fund shall nevertheless remain liable to tax on any gratuity
paid to any employee.
Contributions by employer, when deemed to be income of employer.
7. Where
any contributions by an employer (including the interest thereon, if any) are
repaid to the employer, the amount so repaid shall be deemed for the purposes
of income-tax 29[R69] [***]
to be the income of the employer of the previous year in which they are so
repaid.
Appeals.
8. (1) An employer objecting to an order of
the 30[R70] [Chief
Commissioner or Commissioner] refusing to accord approval to a gratuity fund
or an order withdrawing such approval may appeal, within sixty days of such
order, to the Board.
(2) The appeal shall be in such form and shall be verified in
such manner and shall be subject to the payment of such fee as may be
prescribed.31[R71]
32[R72] [Particulars
to be furnished in respect of gratuity funds.
8A. The
trustees of an approved gratuity fund and any employer who contributes to an
approved gratuity fund shall, when required by notice from the 33[R73] [Assessing]
Officer, furnish within such period, not being less than twenty-one days from
the date of the notice, as may be specified in the notice, such return, statement,
particulars or information, as the 34[R74] [Assessing]
Officer may require.]
Provisions relating to rules.
9. (1) In
addition to any power conferred in this Part, the Board may make rules—
(a) prescribing the
statements and other information to be submitted along with an application for
approval ;
(b) limiting the
ordinary annual and other contributions of an employer to the fund ;
35[R75] [(bb) regulating the investment or deposit of the
moneys of an approved gratuity fund :
Provided that no rule made under this clause shall
require the investment of more than fifty per cent of the moneys of such fund
in Government securities36[R76] as
defined in section 2 of the Public Debt Act, 1944 (18 of 1944) ;]
(c) providing for
the assessment by way of penalty of any consideration received by an employee
for an assignment of, or the creation of a charge upon, his beneficial interest
in an approved gratuity 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
[R1]See also Circular No. 188, dated 16-1-1976. For details, see Income-tax Act.
[R2]See rules 67 to 81 and Form Nos. 40A, 40B, 41 and 42 for form of nomination for recognised provident fund/gratuity fund, form of notice for modification of nomination, form of account of recognised provident fund, and form of appeal, respectively.
[R3]“88(2)(vi)” should now
be substituted for “87(1)(d)”.
[R4]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R5]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R6]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R7]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R8]Inserted
by the Finance Act, 1974, w.e.f. 1-4-1974.
[R9]See rule 75.
[R10]Substituted
for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R11]Substituted
for “ten” by the Finance Act, 1997, w.e.f. 1-4-1998.
[R12]Words “exceeds one-third of the salary of the employee or” omitted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981.
[R13]Words “and super-tax” omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R14]Substituted
by the Finance Act, 1965, w.e.f. 1-4-1965.
[R15]Substituted for “section 80A or, as the case may be, to a deduction from the amount of income-tax with which he is chargeable on his total income of an amount of income-tax determined in accordance with section 87” by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968. Section 80C has now been replaced by section 88.
[R16]Inserted
by the Finance Act, 1974, w.e.f. 1-4-1975.
[R17]Inserted by the Finance Act, 1974, w.e.f. 1-4-1975
[R18]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R19]Substituted
for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R20]Substituted for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R21]Words “and super-tax” omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R22]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R23]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R24]Substituted
for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R25]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R26]See
rules 67 to 81.
[R27]Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971
[R28]For
definition of “Government security”
[R29]Substituted for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R30]See
rules 82 to 97
and Form No. 43 for form of appeal.
[R31]“88(2)(vii)” should now be substituted for “87(1)(e)”.
[R32]Substituted for “206(2)” by the Finance Act, 1987, w.e.f. 1-6-1987.
[R33]Substituted
for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R34]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R35]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R36]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R37]See also Circular No. 500, dated 9-12-1987, Circular No. 444, dated 13-12-1985, Circular No. 482, dated 26-3-1987 and Circular No. 595, dated 5-3-1991. For details, see Income-tax Act.
[R38]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R39]Substituted for “and of the accounts of the fund for the last year” by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971
[R40]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R41]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R42]Substituted
for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R43]Words
“and super-tax” omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R44]See
rule 33 and Form No. 22.
[R45]Inserted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R46]Substituted for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R47]Substituted
for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R48]Substituted for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R49]Words “sub-section (1) of” omitted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R50]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R51]See
rule 97 and Form No. 43.
[R52]Substituted
for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R53]Substituted
for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R54]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R55]Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971
[R56]For definition of “Government security”
[R57]Substituted for “income-tax and super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[R58]See
rules 98 to 111 and Form No. 44 for form of appeal.
[R59]Inserted
by the Finance Act, 1972, w.e.f. 1-4-1973
[R60]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R61]Substituted
for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R62]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R63]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R64]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R65]Substituted for “and of the accounts of the fund for the last three years” by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.
[R66]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R67]Substituted
for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R68]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988
[R69]Words “and super-tax” omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R70]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R71]See rule 111 and Form No. 44
[R72]Inserted
by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.
[R73]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R74]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R75]Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.
[R76]For
definition of “Government security”