Dear Sir,Can superannuation fund be used by the employer or trust in other activities?
From India, Bharuch
1From India, Bharuch
when trust is formed for supperannuation, once employer desposit premium ,he has not right to ultilise the Fund
From India, Hyderabad
From India, Hyderabad
Mr.Nagi,
Pl. read the below article. How the trusts will meet the interest burden without investing anywhere.
The returns earned by private provident funds and superannuation funds from their investments in shares of companies will not attract income tax as the government plans to give such investments tax-free status, according to finance ministry officials. The finance ministry, which has allowed the entities to channelise up to 15% of their corpus in equities, is now set to amend the income-tax rules to facilitate this. The tax-free status would allow more of retirement savings to flow into shares, which over a long period earn higher returns those other assets. Private sector companies having more than a certain minimum number of employees can seek permission to manage the retirement savings of their employees instead of giving the corpus to the Employees’ Provident Fund Organisation, a government entity. The Central Board of DirectTaxes (CBDT) is likely to carry out necessary changes in the income-tax rules to allow private provident funds and superannuation funds to allow their equity investments tax-free status. A finance ministry official, who did not wish to be identified, said the change in rule could be done through a notification and would not require an amendment in the Income Tax Act. A change in the Act can be effected by way of the legislative process, through the Finance Act in the Budget. The department of economic affairs (DEA) under the finance ministry had notified new norms for private provident fund trusts in August this year, permitting them to invest up to 15% of their corpus in the stock market instead of the earlier 5%. The new investment pattern comes into effect from April 1, 2009. The department of economic affairs has now written to the CBDT asking it to carry out amendments in its income-tax rules. Income-tax rule 67 prescribes an investment pattern for private provident funds and superannuation funds which is to be followed to avail tax benefits: income earned on investments that fall outside the pattern prescribed is liable to tax. Therefore, in absence of the tax-free status, even though a higher allocation for equities is allowed, the returns would have been subject to tax. The official said that although most of the significant changes in the income-tax laws are made through the Finance Act, the CBDT will not wait for the Budget to effect the amendment. With the present government’s term ending in May, there may not be a full-fledged Budget 2009. The new investment norm prescribed by the DEA will come into effect from April 1 and trusts following it will not be able to avail tax benefit since it would be in deviation of the income-tax guidelines. The move to allow tax benefit for equity investments by private provident funds and superannuation funds would facilitate more retirement savings to flow into the stock market and help it deepen further.
From India, Lucknow
Pl. read the below article. How the trusts will meet the interest burden without investing anywhere.
The returns earned by private provident funds and superannuation funds from their investments in shares of companies will not attract income tax as the government plans to give such investments tax-free status, according to finance ministry officials. The finance ministry, which has allowed the entities to channelise up to 15% of their corpus in equities, is now set to amend the income-tax rules to facilitate this. The tax-free status would allow more of retirement savings to flow into shares, which over a long period earn higher returns those other assets. Private sector companies having more than a certain minimum number of employees can seek permission to manage the retirement savings of their employees instead of giving the corpus to the Employees’ Provident Fund Organisation, a government entity. The Central Board of DirectTaxes (CBDT) is likely to carry out necessary changes in the income-tax rules to allow private provident funds and superannuation funds to allow their equity investments tax-free status. A finance ministry official, who did not wish to be identified, said the change in rule could be done through a notification and would not require an amendment in the Income Tax Act. A change in the Act can be effected by way of the legislative process, through the Finance Act in the Budget. The department of economic affairs (DEA) under the finance ministry had notified new norms for private provident fund trusts in August this year, permitting them to invest up to 15% of their corpus in the stock market instead of the earlier 5%. The new investment pattern comes into effect from April 1, 2009. The department of economic affairs has now written to the CBDT asking it to carry out amendments in its income-tax rules. Income-tax rule 67 prescribes an investment pattern for private provident funds and superannuation funds which is to be followed to avail tax benefits: income earned on investments that fall outside the pattern prescribed is liable to tax. Therefore, in absence of the tax-free status, even though a higher allocation for equities is allowed, the returns would have been subject to tax. The official said that although most of the significant changes in the income-tax laws are made through the Finance Act, the CBDT will not wait for the Budget to effect the amendment. With the present government’s term ending in May, there may not be a full-fledged Budget 2009. The new investment norm prescribed by the DEA will come into effect from April 1 and trusts following it will not be able to avail tax benefit since it would be in deviation of the income-tax guidelines. The move to allow tax benefit for equity investments by private provident funds and superannuation funds would facilitate more retirement savings to flow into the stock market and help it deepen further.
From India, Lucknow
Dear Sir,
The amount paid as contribution to the Superannuation Fund can be used only for the purposes stated in the trust deed.
Normally, they can be invested in the permitted investment avenues or paid as premium for a superannuation policy, so as to generate a return on the fund corpus.
In case you have any specific query, we can help you.
Please contact us at
or 09310270884.
Thanks & Regards,
Avika Kapoor
Manager-Business Development
E-173, Kalkaji, New Delhi - 110019
011-4055 3774
From India, New Delhi
The amount paid as contribution to the Superannuation Fund can be used only for the purposes stated in the trust deed.
Normally, they can be invested in the permitted investment avenues or paid as premium for a superannuation policy, so as to generate a return on the fund corpus.
In case you have any specific query, we can help you.
Please contact us at
Thanks & Regards,
Avika Kapoor
Manager-Business Development
E-173, Kalkaji, New Delhi - 110019
011-4055 3774
From India, New Delhi
hello sir,
i have been alloted with a work to find the best prospects for investing pf trust money in all four sectors i.e central state psu and private bonds....can u guide me wat investment pattern i should adopt and what all are options which can give me maximum yeild....
From India, New Delhi
i have been alloted with a work to find the best prospects for investing pf trust money in all four sectors i.e central state psu and private bonds....can u guide me wat investment pattern i should adopt and what all are options which can give me maximum yeild....
From India, New Delhi
Dear All,
First of all the funds of the Superannuation Fund are handled by the Fund managers with the approvals of the Trustees and not by Company. The funds are utilised according to the norms laid down in the Trust Deed and Fund Rules. Expenses of Superannuation Fund such purchase of pension annuity, settlement of retiral dues, investments are all done with the approval of the Trustees and subject to audit. At the end of each financial year after the audit the trustees inform members about their accumulations in the Superannuation Fund if it is Defined contribution Pension fund. If it is Defined Benefit Fund no such statements are issued but the total corpus has to be tallied at the time of audit by showing investment scripts and bank balances. All the superannuation Funds which are administered in house have to go thro these processes. If the Superannuation fund is administered by LIC then the Trustees remit the annual contribution to LIC and LIC every year sends statement to the Trustees showing accumulations of each and every individual members. Therefore Company literally has no access to the money of superannuation fund unless there is a nexus among the Trustees/ Fund Manager and the Company.
From India, Calcutta
First of all the funds of the Superannuation Fund are handled by the Fund managers with the approvals of the Trustees and not by Company. The funds are utilised according to the norms laid down in the Trust Deed and Fund Rules. Expenses of Superannuation Fund such purchase of pension annuity, settlement of retiral dues, investments are all done with the approval of the Trustees and subject to audit. At the end of each financial year after the audit the trustees inform members about their accumulations in the Superannuation Fund if it is Defined contribution Pension fund. If it is Defined Benefit Fund no such statements are issued but the total corpus has to be tallied at the time of audit by showing investment scripts and bank balances. All the superannuation Funds which are administered in house have to go thro these processes. If the Superannuation fund is administered by LIC then the Trustees remit the annual contribution to LIC and LIC every year sends statement to the Trustees showing accumulations of each and every individual members. Therefore Company literally has no access to the money of superannuation fund unless there is a nexus among the Trustees/ Fund Manager and the Company.
From India, Calcutta
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