Excluded PFs can breathe easy

If they fail to get the exemption by April 1, 2007, the recognition granted to them by the I-T department would stand null and void. According to Finance Ministry, the new condition only seeks to provide legislative synergy between the I-T Act and the EPF amp; MP Act.

It says, 8216;8216;The fund set-up by an establishment should be recognised under the Employees8217; Provident Funds and Miscellaneous Provisions EPF amp; MP Act, 1952, and such establishment should be exempted from the operation of all or any provisions of any scheme referred to in Section 17 of that Act8217;8217;.

However, the ministry adds, 8216;8216;As regards the existing recognized provident funds, it will continue to be recognized under the I-T Act if the provisions of sub-sections 3 and 4 of Section 1 of the EPF amp; MP Act applies and if the establishment is exempt under Section 17 of the EPF amp; MP Act.8217;8217;

It then adds that such recognised provident funds are required to fulfill the new condition by March 31, 2007, to continue enjoying the recognition under the

I-T Act. It hastens to clarify that there is no move to derecognize any fund, as has been apprehended in some quarters. However, the fear factor among PF trustees and corporate India continues to loom large because the EPFO will have the discretion to grant them the exemption or not.

To safeguard employee interest, the government intends to bring these funds under the ambit of PFRDA.