Subscribers of private PF trusts may lose tax benefits

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Interim Budget failed to extend a crucial deadline on private PFs, leaving employees of at least 50 firms without tax benefits. Interim Budget failed to extend a crucial deadline on private PFs, leaving employees of at least 50 firms without tax benefits.
SummaryPrivate PF trusts are floated by companies, including multinational firms.

and education institutes as well as NGOs.

Since then, the EPFO has cleared some proposals but officials said that a majority of them still need to provide relevant information for the exemption. “Clearance for about 100 such trusts is still pending. The rest are being placed before the Central Board of Trustees for approval,” the official said.

Deadline nears

* The Finance Act has made no mention of extending a crucial deadline for availing tax exemption certificates

* As a result, employees who have parked savings with private PF trusts will have no tax benefits as contributions would be treated as income

* In 2006, it was made mandatory for these private PF trusts to seek exemption certificates within a year to get tax benefits

* The option to extend the deadline can be taken up in the full Budget, but subscribers who withdraw between April-July may have to pay tax

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