EPFO meet in March for tax exemption to private PF trusts
20 Feb 2014 10:22 PM GMT
In a bid to protect tax benefits for subscribers of about 70 private provident fund trusts, retirement fund body EPFO will call a meeting of an empowered committee in the first week of March to grant them regular tax exemption.
The meeting is being called after the Finance Minister P Chidambaram did not extend a 31 March deadline for the trusts to get regular tax exemption through the Employees' Provident Fund Organisation (EPFO).
Chidambaram made it mandatory in 2006 for these trusts to procure an exemption certificate by 31 March, 2007, a deadline that has been extended and is now set to expire on 31 March.
‘We have already expedited the process of granting regular exemption to private PF trusts. We will call a meeting of an empowered committee for the purpose in the first week of next month,’ EPFO's Central PF Commissioner K K Jalan said.
Regular tax exemption is granted by the EPFO's apex decision-making body, the Central Board of Trustees, headed by the Labour Minister. However, the power to grant exemption was delegated to the committee by the trustees on 13 January.
‘There are about 70 cases pending with the EPFO for grant of regular tax exemption. We are expecting to approve 30-40 such cases in the meeting planned next month,’ Jalan said. According to Jalan, the EPFO will not approach the Finance Ministry on this issue and will try to complete the process of pending applications by 31 March. ‘I had meetings with the representatives of these trusts in Delhi and also visited Mumbai to discuss the issue with them. There are cases where applicants have not provided required documents,’ he said.
‘We are trying to do it well in time (by 31 March). But even then there could be 25-30 trusts which may not get the regular tax exemption,’ he added.
Private PF trusts are formed by firms that manage the money and accounts of their workers themselves and have exemption from filing PF returns. These trusts enjoy income tax and other benefits at par with EPFO subscribers. Such trusts can start functioning after seeking ad hoc tax exemption from the regional commissioner after which they apply for regular tax exemption.
Once approved, a PF trust's regular tax exemption is notified by the Labour Ministry or state government.
The meeting is being called after the Finance Minister P Chidambaram did not extend a 31 March deadline for the trusts to get regular tax exemption through the Employees' Provident Fund Organisation (EPFO).
Chidambaram made it mandatory in 2006 for these trusts to procure an exemption certificate by 31 March, 2007, a deadline that has been extended and is now set to expire on 31 March.
‘We have already expedited the process of granting regular exemption to private PF trusts. We will call a meeting of an empowered committee for the purpose in the first week of next month,’ EPFO's Central PF Commissioner K K Jalan said.
Regular tax exemption is granted by the EPFO's apex decision-making body, the Central Board of Trustees, headed by the Labour Minister. However, the power to grant exemption was delegated to the committee by the trustees on 13 January.
‘There are about 70 cases pending with the EPFO for grant of regular tax exemption. We are expecting to approve 30-40 such cases in the meeting planned next month,’ Jalan said. According to Jalan, the EPFO will not approach the Finance Ministry on this issue and will try to complete the process of pending applications by 31 March. ‘I had meetings with the representatives of these trusts in Delhi and also visited Mumbai to discuss the issue with them. There are cases where applicants have not provided required documents,’ he said.
‘We are trying to do it well in time (by 31 March). But even then there could be 25-30 trusts which may not get the regular tax exemption,’ he added.
Private PF trusts are formed by firms that manage the money and accounts of their workers themselves and have exemption from filing PF returns. These trusts enjoy income tax and other benefits at par with EPFO subscribers. Such trusts can start functioning after seeking ad hoc tax exemption from the regional commissioner after which they apply for regular tax exemption.
Once approved, a PF trust's regular tax exemption is notified by the Labour Ministry or state government.
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