With employees facing the threat of losing income tax waiver on retirement benefits, the latest Budget has proposed to extend the deadline for seeking exemption certificate by private PF trusts by one year till March 31, 2014.
“With a view to providing further time to the Employees’ Provident Fund Organization (EPFO) to decide on the pending applications seeking exemption under Section 17 of the Employees Provident Fund & Miscellaneous Provision Act, it is proposed to amend the first proviso, so as to extend the time limit from March 31, 2013 to March 31, 2014,” said the memorandum explaining the provisions of the Finance Bill, 2013. “It has been noticed that a number of applications are yet to be processed by the EPFO for grant of exemption under Section 17 of the EPF & MP Act. This amendment will take effect retrospectively from April 1, 2013,” it said.
In 2006, Finance Minister P. Chidambaram, who was at the helm of affairs, had made it mandatory for all private PF trusts (PPFT) to seek exemption certificates either from the Labour Ministry or from the State Labour Department within a year for enjoying the tax benefits.
Since all these trusts could not get the exemption certificates in that year, annual waiver was being given by successive budgets, on request from the Labour Ministry. The firms operating in one State are required to seek exemption from that State’s Labour Department. Entities having operations in more than one State will have to get it from the Union Labour Ministry. There were around 2,700 PPFTs, out of which majority did did not have the exemption certificate. —PTI