TDS on Payment of Accumulated Balance Under Recognised Provident Fund and Contribution from Approved Superannuation Fund:
The trustees of a Recognized Provident Fund, or
any person authorized by the regulations of the Fund to make payment of
accumulated balances due to employees, shall in cases where sub-rule(l)
of Rule 9 of Part A of the Fourth Schedule to the Act applies, at the
time when the accumulated balance due to an employee is paid, make
therefrom the deduction specified in Rule 10 of Part A of the Fourth
Schedule to the Act.
The accumulated balance is treated as income chargeable under the head "Salaries"
Where any contribution made by an employer,
including interest on such contributions, if any, in an approved
Superannuation Fund is paid to the employee, tax on the amount so paid
shall be deducted by the trustees of the Fund to the extent provided in
Rule 6 of Part B of the Fourth Schedule to the Act. TDS should be at the
average rate of tax, the employee was liable to be taxed during the
preceding three years or during the period, if that period is less than
three years, when he was member of the fund.
The deductor shall remain liable to deduct tax on any sum
paid on account of returned contributions (including interest, if any)
even if a fund or part of a fund ceases to be an approved Superannuation
fund.
