problem in pf trust
k c sahu
(Querist) 21 May 2009
This query is : Resolved
Need your help
1.Company X has a exempted pf trust covering all the employees.Now management wants to contribute 12% of actual salary towards employers contribution to the officers and 12% on Rs.6500/- to the workers.
Q: Whether there can be two types of contribution in one pf trust?
Q: Whether an organisation can have two pf trusts?
A V Vishal
(Expert) 22 May 2009
Dear Sahu,
Your query is not clear, please express it properly/
Manish Singh
(Expert) 22 May 2009
you are only liable for contribution towards employees eraning 6500 or less. the employees eraning more than that can not areate any liability on you for contribution on your part. so it doesnt matter if you are handling two kind of pf trust. you are to only see that you are complying with the provisions of ythe pf act.
k c sahu
(Querist) 12 June 2009
Sir,
Kindly give any case law on this.
Regards
k.c.sahu
k c sahu
(Querist) 12 June 2009
LET ME GIVE THE DETAILS:
BRIEF FOR SEEKING GUIDANCE IN THE MATTER UNDER THE EMPLOYEES PROVIDENT FUNDS & MISCELLANEOUS PROVISIONS ACT, 1952.
q We have set up a Compulsory Provident Fund Trust with effect from 1st November, 1965 and obtained exemption under Sec. 17 of the EPF & MP Act from the Provident Fund Authorities and appropriate Govt. The exemption is continuing. This Trust is also recognized under the Income Tax Act.
q The following categories of employees are covered under the above Trust :
- Officers / Clerical Staff / Permanent Workmen, Casual Labour and Contract Labour engaged by various Contractors in our Establishment.
The Provident fund Contribution in respect of all categories of employees as mentioned above is limited upto a Wage / Salary of Rs.6500/- (present statutory limit) and remitted to the said Trust alongwith the matching contribution from the Employer.
q We are also having one Optional Provident Fund Trust at our sister works.This Trust too was accorded recognition by the Income Tax Authorities. Since this PF Trust was established outside the purview of the EPF & MP Act, exemption was not required to be obtained from the PF Authorities. Only Officers of the Company are covered in this trust. The contributions on the Salaries beyond Rs.6500/- (beyond statutory limit) in respect of Officers are being remitted to the said Trust alongwith matching contribution from the Employer.
q The Finance Act, 2007, amended Rule 4 (ea) of Part A of Schedule IV to the Income-Tax, 1961 Act, whereby the establishments maintaining their own private Provident Fund Trusts (PF Trust) were required to obtain exemption from the Central Provident Fund Commissioner under Section 17 of The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (PF Act) in order to avail recognition from the tax authorities. Provisions to sub Rule 1 of Rule 3 of Part A of Schedule IV to the Act were also amended which provided that the existing establishments having set up their own PF Trust prior to April 1, 2006 were required to obtain such exemption before expiry of March 31, 2007 (which was subsequently extended to March 31, 2008 and again upto March 31, 2009, by the Finance Act, 2007 and Finance Act, 2008, respectively) in order to continue to be the recognized Provident Fund under the Act.
q Since obtaining approval for the Optional Provident Fund under Sec. 17 of EPF & MP Act will be time consuming & also the fact that Compulsory Provident Fund Trust is already a recognized Trust by the PF Authorities, it has been decided that w.e.f. 01.04.2009, merge the said Optional PF Trust with the Compulsory PF Trust, approved under Sec. 17 of EPF & MP Act.
q In other words, the accumulations standing to the credit of the Officers in the Optional Provident Fund Trust will have to be transferred to their respective accounts in the Compulsory Provident Fund Trust .
q In this connection, we seek your considered opinion and guidance on the following issues :
- What are the formalities to be completed with the Provident Fund Authorities while transferring the past accumulations of the Members from the Optional Provident Fund Trust to Compulsory Provident Fund Trust i.e. changes in the Trust Rules and to obtain approval for the same etc.,
- As mentioned, the PF Contributions for Workmen category are limited on a Wage / Salary upto the present statutory limit of Rs.6500/- only. When we transfer the past accumulations of PF Contributions of Officers beyond Rs.6500/- from OPF Trust to Compulsory Provident Fund Trust, whether it will entail making any amendments in the Trust Rules to cover full Salary of only Officers Category.
The objectives are (1) To continue to get the Income Tax recognition in respect of the Officers on their PF contribution beyond statutory limit and (2) to ensure that Employer’s contribution of PF on the Wages / Salaries
k c sahu
(Querist) 17 June 2009
please suggest something on the above subject.
Regards
k.c.sahu
