The Tax Publishers

Procedures and Precautions in Relation to Provident/ Superannuation/Gratuity Fund

1. Procedure for applying for recognition of provident fund [Part A, Schedule IV and Rule 77 and 78, Income Tax Rules]

(i) The employer maintaining provident fund should ensure that the conditions mentioned in Rule 4 of Part A of the Schedule IV to the Income Tax Act and Rules 67 to 76 of the Income Tax Rules, 1962 are satisfied, before approaching the Commissioner of Income Tax for recognition of any provident fund.

(ii) If any of the conditions mentioned in rule 4 are not satisfied the employer of the fund has to approach the Commissioner of Income Tax to relax the conditions in view of rule 5 of part A of schedule IV to Income Tax Act, 1961.

(iii) An application for recognition of provident fund maintained by the employer shall be made to the Chief Commissioner or Commissioner of Income Tax accompanied by the following documents :

nthe trust deed, if any in original with one copy thereof, the latter to be retained by the Chief Commissioner or Commissioner; and

nthe rules of the fund.

If the original trust deed cannot be conveniently produced, the employer may approach the Chief Commissioner/Commissioner of Income Tax to accept in lieu of the original a copy certified either by a magistrate or in any manner specified in rule 17 of the Companies (Central Governments) General Rules, 1956. [Rule 77(1) of Income Tax Rules, 1962]

(iv) The application should be submitted through the assessing officer of the area in which the accounts of the fund are kept or, if the accounts are kept outside India, through the assessing officer of the area in which the local headquarter of the employer is situated. [Rule 77(2) of Income Tax Rules, 1962]

(v) The application shall be furnished in Form number 40C and shall include the following information :

(a) Name of employer and address, his business, profession, etc., also his principal place of business.

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