1,550 PF trusts may lose I-T benefits

January 27, 2009
1 min read

Over 1,550 private provident fund trusts run by Indian companies could lose their income tax benefits in less than three months time.

These private trusts enjoy tax benefits on the basis of their affiliation to the Employees Provident Fund Organisation (EPFO) through temporary relaxations granted by it. The deadline for getting recognised by the government as an exempted fund under EPFO expires on March 31, 2009.

The finance ministry had mandated in 2006 that private provident trusts should obtain exemption under the EPF Act within a year from the labour ministry if they wanted to continue enjoying tax benefits under the Income-Tax Act.

The deadline has been extended twice since then as the process has proved to be tedious. Till now, only one company has till been able to get exemption, according to PHDCCI member and chartered accountant Sushil Jain.

The EPFO, which is supposed to forward exemption applications filed by the private trusts to the government for final approval after scrutinising them, has forwarded 400 applications of the total 1,550 in the last two-and-a-half years, Mr Jain said. The fate of these 400 funds is also not known as the labour ministry is in double minds about giving its approval, he added. A labour ministry official clarified that several funds are violating investment accounting norms. Industry bodies are now planning to approach the finance ministry for further extension of the deadline, Mr Jain said.

There are a total of 2,589 private trusts as per EPFO statistics, with Rs 65,000 crore corpus, which are recognised under the Income-Tax Act. However, only about 1,000 trusts enjoy the exempted status which was given to them way back in the seventies, Mr Jain said. The remaining are operating as ‘deemed exempted funds’ as they only have temporary relaxation orders by the EPFO.

[Source: http://economictimes.indiatimes.com]

Previous Story

Time to revisit dividend taxation

Next Story

Failure to remit tax will invite prosecution: IT dept

Latest from Blog

Income Tax deduction for procurements from MSMEs only upon actual payment

By Shaleen Shah | LinkedIn, assisted by Divyansh Jain Introduction This Note is relevant to computation of income under the head ‘Income from business and profession’. Section 43B of the Income Tax Act provides a list of expenses allowed as deduction, on cash basis irrespective of the year of accounting.

Foreign companies may be required to file Tax Returns in India

by Nexdigm Private Limited as published on mondaq.com Impact of increase in withholding tax on rates for Fees for Technical Services and Royalty As per Indian Tax laws1, payments made to Non-Residents/Foreign Companies for Fees for Technical Services (FTS) and Royalties were liable to tax at the effective tax rate of

How Cryptocurrencies Are Taxed In India

[Source: forbes.com; Authors: Justin M Bharucha, Aashika Jain] Cryptocurrencies and non-fungible tokens (NFTs) are presently unregulated in India. While the Reserve Bank of India (RBI) had sought to ban cryptocurrencies in 2018, the Supreme Court quashed the attempted ban leaving cryptocurrencies in regulatory limbo – neither illegal nor, strictly speaking,

Higher rate of TDS in certain situations from 1st July 2021

[By Shaleen Shah (Partner), VNCA] Finance Act 2021, has introduced a new section 206AB effective from 1-Jul-2021 wherein a payer/buyer is responsible to deduct TDS at higher rate (i.e. twice the rate as specified under the relevant provision of the Income Tax Act or twice the rate/ rates in force;
GoUp

Don't Miss

How Cryptocurrencies Are Taxed In India

[Source: forbes.com; Authors: Justin M Bharucha, Aashika Jain] Cryptocurrencies and

Only 329 startups can claim tax holiday under Startup India

[Source: cnbctv18.com] Exactly five years since the launch of the