law related to superannuation

Part B

Approved superannuation funds⁴⁵

[See sections 2(6), 10(13), 10(25)(iii), 36(1)(iv), ⁴⁶87(1)(e), 192(5), ⁴⁷[206]]

Definitions.

1. In this Part, unless the context otherwise requires, "employer", "employee", "contribution" and "salary" have, in relation to superannuation funds, the meanings assigned to those expressions in rule 2 of Part A in relation to provident funds.

Approval and withdrawal of approval.

2. (1) The ⁴⁸[^48a[Principal Chief Commissioner or] Chief Commissioner or ^48a[Principal Commissioner or] Commissioner] may accord approval to any superannuation fund or any part of a superannuation fund which, in his opinion, complies with the requirements of rule 3, and may at any time withdraw such approval, if, in his opinion, the circumstances of the fund or part cease to warrant the continuance of the approval.

(2) The ⁴⁸[^48a[Principal Chief Commissioner or] Chief Commissioner or ^48a[Principal Commissioner or] Commissioner] shall communicate in writing to the trustees of the fund the grant of approval with the date on which the approval is to take effect, and, where the approval is granted subject to conditions, those conditions.

(3) The ⁴⁸[^48a[Principal Chief Commissioner or] Chief Commissioner or ^48a[Principal Commissioner or] Commissioner] shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect.

(4) The ⁴⁹[^49a[Principal Chief Commissioner or] Chief Commissioner or ^49a[Principal Commissioner or] Commissioner] shall neither refuse nor withdraw approval to any superannuation fund or any part of a superannuation fund unless he has given the trustees of that fund a reasonable opportunity of being heard in the matter.

Conditions for approval.

3. In order that a superannuation fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the Board may, by rules, prescribe—

⁵⁰(a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in India, and not less than ninety per cent of the employees shall be employed in India;

(b) the fund shall have for its sole purpose the provision of annuities for employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement, or for the widows, children or dependants of persons who are or have been such employees on the death of those persons ;

(c) the employer in the trade or undertaking shall be a contributor to the fund ; and

(d) all annuities, pensions and other benefits granted from the fund shall be payable only in India.

Application for approval.

4. (1) An application for approval of a superannuation fund or part of a superannuation fund shall be made in writing by the trustees of the fund to the ⁵¹[Assessing] Officer by whom the employer is assessable, and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules ⁵²[and, where the fund has been in existence during any year or years prior to the financial year in which the application for approval is made, also two copies of the accounts of the fund relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made)] for which such accounts have been made up, but the ⁵³[^53a[Principal Chief Commissioner or] Chief Commissioner or ^53a[Principal Commissioner or] Commissioner] may require such further information to be supplied as he thinks proper.

(2) If any alteration in the rules, constitution, objects or conditions of the fund is made at any time after the date of the application for approval, the trustees of the fund shall forthwith communicate such alteration to the ⁵⁴[Assessing] Officer mentioned in sub-rule (1), and in default of such communication any approval given shall, unless the ⁵⁵[^55a[Principal Chief Commissioner or] Chief Commissioner or ^55a[Principal Commissioner or] Commissioner] otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect.

Contributions by employer when deemed to be income of employer.

5. Where any contributions by an employer (including the interest thereon, if any) are repaid to the employer, the amount so repaid shall be deemed for the purpose of income-tax ⁵⁶[***] to be the income of the employer of the previous year in which it is so repaid.

Deduction of tax on contributions paid to an employee.

⁵⁷6. Where any contributions made by an employer, including interest on contributions, if any, are paid to an employee during his lifetime ⁵⁸[in circumstances other than those referred to in clause (13) of section 10], ⁵⁹[tax] on the amounts so paid shall be deducted at the average rate of ⁵⁹[tax] at which the employee was liable to ⁵⁹[tax] during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government within the prescribed time and in such manner as the Board may direct.

Deduction from pay of and contributions on behalf of employee to be included in return.

7. Where an employer deducts from the emoluments paid to an employee or pays on his behalf any contributions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under ⁶⁰[***] section 206.

Appeals.

8. (1) An employer objecting to an order of the ⁶¹[^61a[Principal Chief Commissioner or] Chief Commissioner or ^61a[Principal Commissioner or] Commissioner] refusing to accord approval to a superannuation fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board.

(2) The appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed.⁶²

Liability of trustees on cessation of approval.

9. If a fund or a part of a fund for any reason ceases to be an approved superannuation fund, the trustees of the fund shall nevertheless remain liable to tax on any sum paid on account of returned contributions (including interest on contributions, if any), in so far as the sum so paid is in respect of contributions made before the fund or part of the fund ceased to be an approved superannuation fund under the provisions of this Part.

Particulars to be furnished in respect of superannuation funds.

10. The trustees of an approved superannuation fund and any employer who contributes to an approved superannuation fund shall, when required by notice from the ⁶³[Assessing] Officer, within such period, not being less than twenty-one days from the date of the notice, as may be specified in the notice, furnish such return, statement, particulars or information, as the ⁶³[Assessing] Officer may require.

Provisions relating to rules.

11. (1) In addition to any power conferred by this Part, the Board may make rules—

(a) prescribing the statements and other information to be submitted along with an application for approval ;

(b) prescribing the returns, statements, particulars, or information which the ^63a[Assessing] Officer may require from the trustees of an approved superannuation fund or from the employer ;

(c) limiting the ordinary annual contribution and any other contributions to an approved superannuation fund by an employer ;

⁶⁴[(cc) regulating the investment or deposit of the moneys of an approved superannuation fund :

Provided that no rule made under this clause shall require the investment of more than fifty per cent of the moneys of such fund in ⁶⁵Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944) ;]

(d) providing for the assessment by way of penalty of any consideration received by an employee for an assignment of, or creation of a charge upon, his beneficial interest in an approved superannuation fund ;

(e) determining the extent to, and the manner in, which exemption from payment of ⁶⁶[tax] may be granted in respect of any payment made from a superannuation fund from which approval has been withdrawn ;

(f) providing for the withdrawal of approval in the case of a fund which ceases to satisfy the requirements of this Part or of the rules made thereunder ; and

(g) generally, to carry out the purposes of this Part and to secure such further control over the approval of the superannuation funds and the administration of approved superannuation funds as it may deem requisite.

(2) All rules made under this Part shall be subject to the provisions of section 296.