New Delhi: Private PF trusts which are operating without regular income tax exemption may come under tax net from April 1, as they were not given extension to complete the statutory requirement in the Budget.
Earlier in the interim Budget, former Finance Minister P Chidambaram did not extend the March 31 deadline for these trusts to get regular tax exemption through the Employees' Provident Fund Organisation (EPFO).
Chidambaram had made it mandatory in 2006 for these trusts to procure an exemption certificate by March 31, 2007, a deadline that has been extended several times since then and expired on March 31 this year.
Private PF trusts are formed by firms that manage the money and accounts of their workers themselves and have exemption from filing PF returns. The members of these trusts enjoy income tax and other benefits at par with EPFO subscribers.
Such trusts can start functioning after seeking ad hoc tax exemption from the regional commissioner after which they apply for regular tax exemption.
Once approved, a PF trust's regular tax exemption is notified by the Labour Ministry or state government.
A senior EPFO official said the retirement body is still processing applications of 148 such trusts for grant of regular tax exemption. An empowered committee of the EPFO is expected to approve 50 such applications this month.
He said EPFO's apex decision making body Central Board of Trustees (CBT) and its empowered committee has already approved 139 such applications, seeking regular tax exemption this year.
According to sources, the EPFO has not sought further extension of the deadline for seeking tax exemption by these trusts.
However, All India General Secretary of Bharatiya Mazdoor Sangh and an EPFO trustee Virjesh Upadhyay said he would take up the case for giving further extension to trusts, seeking regular tax exemption with Labour Minister.
The EPFO official said the government can notify the extension of the deadline later if it decides to do so as the Budget is not yet passed by the Parliament.
There are 3,621 private PF trusts which are regulated by EPFO.
