Private Provident Fund trusts get a year to comply with regulations
The Finance Ministry has allowed private Provident Fund (PF) trusts another year to comply with new norms in order to continue availing tax exemptions.
The Finance Bill, 2008, proposes to extend the time limit to March 31, 2009, to provide time to the Employees’ Provident Fund Organisation (EPFO) to decide on the pending applications seeking exemption under Section 17 of the Employees Provident Fund and Miscellaneous Provisions (EPF&MP) Act, 1952. This is the second such extension, the original deadline of March 31, 2007 being extended by a year.
Private PF trusts broadly cover those employees whose monthly basic salary exceeds Rs 6,500 and are therefore outside the purview of the Government’s PF schemes. These are also set up in cases of very large organisations who manage their own PF, superannuation and gratuity fund.
According to the amendment, it is now compulsory for private PF trusts to comply with the EPF&MP Act to claim exemptions under Section 17 of the Act.
Prior to the amendment, PF trusts, which followed investment norms, needed recognition only from income-tax authorities. The Income-Tax Department has sought to tighten the norms to distance itself from any wrongdoing by making it mandatory for them to get approval from PF commissioners for continuing to get tax exemption.
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