The Fourth Schedule
PART A30
Recognised Provident Funds31
[See sections 2(38),
10(12), 10(25),
36(1)(iv), 3287(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 33[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 :
34[Provided
that in a case where recognition has been accorded to any provident fund on or
before the 31st day of March, 2006 and such provident fund does not satisfy the
conditions set out in clause (ea) of rule 4, the recognition to such
fund shall be withdrawn, if such fund does not satisfy, on or before the 35[31st day of December, 2010], the conditions set
out in the said clause and any other condition which the Board may, by rules specify,
in this behalf :]
36[Provided
further that nothing contained in the first proviso shall apply to the
provident fund of an establishment in respect of which a notification has been
issued by the Central Government under sub-section (2) of section 16 of the
Employees Provident Funds and Miscellaneous Provisions Act, 1952 (19 of
1952).]
(2)
An order according recognition shall take effect on such date as the 37[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 37[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 employees salary in that proportion, at each periodical payment of
such salary in that year, and credited to the employees 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 employees 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;
38[(ea) the
fund shall be a fund of an establishment to which the provisions of sub-section
(3) of section 1 of the Employees Provident Funds and Miscellaneous Provisions
Act, 1952 (19 of 1952)39 apply or of
an establishment which has been notified by the Central Provident Fund
Commissioner under sub-section (4) of section 1 of the said Act, and such
establishment shall obtain exemption under section 17 of the said Act from the
operation of all or any of the provisions of any scheme referred to in that
section;]
(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 40[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;
41[(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 rules42 which the
Board may make in this behalf, the 43[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.
Employers 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 44[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 45[***] 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 46[***].
47[Exemption for
employees 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 48[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 employees ill-health, or by the
contraction or discontinuance of the employers business or other cause beyond
the control of the employee, 49[or]
49[(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 provi-sions of rule 8 not being applicable, the 50[Assessing] Officer shall calculate the total of
the various sums of 51[tax] which
would have been payable by the emp-loyee 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 51[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 employees
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 52[***] 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 53[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 employees 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 54[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 55[Assessing] Officer
such abstracts thereof as the Board may prescribe.
Appeals.
13. (1) An employer objecting to an order of the 56[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 recog- nised 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 employees 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.
57Provisions
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;
58[(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 securities59 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 60[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 funds61
[See sections 2(6),
10(13), 10(25)(iii),
36(1)(iv), 6287(1)(e), 192(5), 63[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 64[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 64[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 64[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 65[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
66(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 67[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 68[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 69[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 70[Assessing]
Officer mentioned in sub-rule (1), and in default of such communication any
approval given shall, unless the 71[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 72[***] 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.
736. Where any
contributions made by an employer, including interest on contributions, if any,
are paid to an employee during his lifetime 74[in circumstances other than those referred to
in clause (13) of section 10], 75[tax] on the amounts so paid shall be deducted
at the average rate of 75[tax] at
which the employee was liable to 75[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 76[***] section 206.
Appeals.
8. (1) An employer objecting to an order of the 77[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.78
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 79[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 79[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 79[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 ;
80[(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 81Government
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 82[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 funds83
[See sections 2(5),
84[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 85[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 86[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 86[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 86[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 87[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 88[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 89[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 90[Assessing] Officer mentioned in sub-rule (1),
and in default of such communication, any approval given shall, unless the 89[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 91[***] 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 92[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.93
94[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 95[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 95[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 ;
96[(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 securities97 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.