An empowered committee of retirement fund body EPFO has approved granting regular tax exemption to 35 private provident fund trusts.
The firms, which got approval for tax exemption, include Bharat Heavy Electricals Ltd, Heavy Engineering Corporation, Axis Bank and Indusind Bank.
The meeting of the panel was called on August 7 as the then finance minister P Chidambaram did not extend a March 31, 2014 deadline for the trusts to get regular tax exemption through EPFO.
Chidambaram had made it mandatory in 2006 for these trusts to procure an exemption certificate by March 31, 2007, a deadline that was extended many times and expired on March 31 this year.
According to a senior official, since the the deadline for getting regular tax exemption is not extended in the full-fledged budget passed in Parliament recently, the defaulting trusts would have come under the income tax net.
Earlier during the first meeting of the committee held on March 28, 2014, it had approved 68 such applications. It approved 20 more such proposals in its second meeting on May 15.
Besides, EPFO's apex decision making body the Central Board of Trustees (CBT) had approved 51 such proposals in two separate meeting earlier this year.
Thus as many as 174 firms' proposals for grant of regular tax exemption have been approved so far this year.
The panel has been empowered by the CBT, headed by the Labour Minister, to grant regular exemption.
"EPFO is still processing 114 such applications for grant of regular tax exemption," a senior EPFO official told PTI.
Asked whether more such applications are expected, he said: "We are getting 3-4 such proposal every month."
Private PF trusts are formed by firms that manage the money and accounts of their workers themselves and have exemption from filing PF returns.
Members of these trusts enjoy 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.
At present, the EPF subscribers are exempted from paying income tax on deposits, accrual of interest and withdrawal of their funds.