The Hindu Business Line : `No move to derecognise private sector PF trusts'

The Finance Ministry today clarified that there is no move to derecognise any of the independent provident fund trusts set up by private sector companies, currently not registered under the Employees' Provident Fund and Miscellaneous Provisions (EPF&MP) Act.

The apprehensions had been sparked off by Clause 56 of the Finance Bill which proposes that the PF trusts set up by private companies under the I-T Act will now have to seek recognition from the EPFO without which they would lose the tax concessions.

The Budget provision says that all these funds will have to fulfil these new conditions by March 31, 2007. Till then the existing funds will enjoy the tax concessions under the I-T Act and once recognised by the EPFO they would continue enjoying the tax concessions beyond March 2007.

In an official release, the Ministry stated, "the new condition (proposed in the Budget) only seeks to provide legislative synergy between the Income-tax Act and the EPF&MP Act."

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