Amendment of Fourth Schedule
112. In the Fourth Schedule to the Income-tax Act, in Part A, with effect from the 1st day of April, 2017,-
(a) in rule 6, in clause (a), after the word “employee”, the words “or one hundred and fifty thousand rupees, whichever is less” shall be inserted;
(b) in rule 8,-
(i) in clause (iii), for the words “such other employer” occurring at the end, the words “such other employer; or” shall be substituted;
(ii) after clause (iii) and before the Explanation, the following clause shall be inserted, namely:-
“(iv) if the entire balance standing to the credit of the employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government.”.
Notes on Clauses:
Clause 112 of the Bill seeks to amend Part A of Fourth Schedule to the Income-tax Act relating to recognised provident fund.
Rule 6 of the aforesaid Schedule, inter alia, provides that contributions made by employer to the credit of an employee participating in a recognised provident fund, which are in excess of twelve per cent. of the salary of the employee, are liable to tax in the hands of the employee.
It is proposed to amend the said rule so as to provide an upper ceiling of one lakh and fifty thousand rupees to such contribution by the employer.
This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to assessment year 2017-2018 and subsequent years.
