Income Tax Act, 2025
Section 3: Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 12013).
3. Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 12013).
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1[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rule 4, the recognition to such fund shall be withdrawn, if such fund does not satisfy, on or before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 2[ 3[31st day of March, 2014]], the conditions set out in the said clause and any other condition which
the Board may, by rules specify, in this behalf:]
4[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 5[6[Principal Chief
Commissioner or Chief Commissioner] or 7[Principal 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 5[6[Principal Chief
Commissioner or Chief Commissioner] or 7[Principal 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.
4. Conditions to be satisfied by recognised provident funds.—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 employee’s salary in that proportion, at
each periodical payment of such salary in that year, and credited to the employee's 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
employee's 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;
of
rule 4, the recognition to such fund shall be withdrawn, if such fund does not satisfy, on or before
the 2[ 3[31st day of March, 2014]], the conditions set out in the said clause and any other condition which
the Board may, by rules specify, in this behalf:]
4[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
of section 16 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
(19 of 1952).]
An order according recognition shall take effect on such date as the 5[6[Principal Chief
Commissioner or Chief Commissioner] or 7[Principal 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.
An order withdrawing recognition shall take effect from the date on which it is made.
An order according recognition to a provident fund shall not, unless the 5[6[Principal Chief
Commissioner or Chief Commissioner] or 7[Principal 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.
4. Conditions to be satisfied by recognised provident funds.—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—
all employees shall be employed in India, or shall be employed by an employer whose
principal place of business is in India;
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 employee’s salary in that proportion, at
each periodical payment of such salary in that year, and credited to the employee's individual account
in the fund;
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
employee's individual account at intervals not exceeding one year;
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;
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;