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Report No. 12

Chapter XXIV

Recognised Provident Fund

Notes to clause 289


The provisions contained in the Chapters on Recognised Provident Funds and Approved Superannuation Funds have, in some case bearing on other sections also. The scheme adopted in the draft is to make a reference, in other sections, to the provisions relating to such funds, wherever convenient. Though this entailed some repetition, it has been done for facilitating reference.

Clause 289

Existing section 58B has been reproduced here. The only change made is the addition of the proviso in sub-clause (1). Section 9 of the Employee's Provident Funds Act, 1952 deems a provident fund established under a scheme in accordance with that Act to be a recognised provident fund under this chapter. So far as the funds established under such schemes are concerned, this deeming provision is sufficient. But certain Provident Funds under that Act have been exempted by Government, under section 17 of that Act, from the operation of the scheme.

Such provident funds would not be covered by the deeming provision and it appears to be desirable to enable a relaxation of the conditions in their case. The proviso is intended to achieve this object. [Such provident Funds have to fulfil the condition laid down in section 58 of the Employee's Provident Fund Act and those conditions are strictly in accordance with the conditions prescribed by section 58(c)].

Section 58B(4), dealing with appeal, has been placed in a separate clause.

Notes to clause 290

Existing section 58C has in the draft, been broken up so as to separate the conditions from the provisions for relaxation of the conditions. The conditions are incorporated in this clause, while provisions relating to relaxation are placed in a separate clause.

Notes to clause 291


All provisions in the nature of relaxation of conditions for recognition of Provident Funds have been collected together in this clause.

Sub-clause (1).- Existing section 58C(1)(a), proviso has been incorporated here. The concluding words "notwithstanding that a proportion not exceeding 10% of the employees is employed outside India, in the existing section, really mean that the proportion of employees employed outside India should not exceed 10%. The wording has, therefore, been altered to bring out the intended meaning.

Other changes are consequential on the breaking up of section 58C into conditions and provisions for relaxation.

Sub-clause (2).- Existing section 58C(1)(b), proviso, refers to the National Service (European British Subjects) Act, 1940 and the National Service (Technical Personnel) Ordinance, 1940. These references have been replaced in the draft by the words "any law for the time being in force", which are more comprehensive.

Other changes are consequential.

Sub-clause (3).- The changes made are consequential on the breaking up of section 58C and combining of section 58C(d), Proviso and latter part of section 58C(1)(g).

Sub-clauses (4) and (5).- No comments are needed.

Notes to clause 292

No comments are needed.

Notes to clause 293

This is new. Sums paid by the employer as contributions towards a recognised provident fund should be allowed to be deducted in computing the employer's income1. Hence this clause.

1. Cf. existing section 58R, main para, middle portion.

Notes to clause 294

No comments are needed.

Notes to clause 295

No comments are needed.

Income-Tax Act, 1922 Back

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